Luxfer Holdings PLC Stock

Good morning. My name is Nikki, and I will be your conference operator today. Welcome to Luxfer's First Quarter 2026 Conference Call. [Operator Instructions] Now I will turn the call over to Kevin Grant, Vice President of Investor Relations and Business Development at Luxfer. Kevin, please go ahead.

Thank you, Nikki, and good morning, everyone. Welcome to Luxfer's first quarter conference call. This morning, we'll be reviewing Luxfer's financial results for the first quarter ended March 29, 2026. I'm pleased to be joined today by Andy Butcher, our Chief Executive Officer; and Steve Webster, our Chief Financial Officer. Today's webcast is accompanied by a presentation that can be accessed at luxfer.com. Please note, any references to non-GAAP financials are reconciled in the appendix of the presentation. Before we begin, a friendly reminder that any forward-looking statements made about the company's expected financial results are subject to future risks and uncertainties.

We undertake no obligation to update any forward-looking statements, whether a result of new information, future events or otherwise. Please refer to the safe harbor statement on Slide 2 of today's presentation for further details. During today's call, we'll be providing adjusted first quarter 2026 financial results, excluding the Graphics Arts business, which was divested in 2025. Now let me introduce Luxfer's CEO, Andy Butcher. Please turn to Slide 3. Andy, please go ahead.

Thank you, Kevin, and good morning, everyone. Thank you for joining us. We delivered a strong start to 2026 with performance in the quarter demonstrating disciplined execution across the business and financial results a little ahead of the expectations we outlined coming into the year. As we indicated previously, 2026 includes variability across certain end markets.

Although that dynamic was evident in the first quarter, we delivered adjusted earnings per share of $0.27, up 17% year-over-year, along with adjusted EBITDA of $12.3 million and margins of 14.7%. This signifies the strengthened earnings power of the portfolio and the ability to sustain profitability at current volume levels.

Within Elektron, although timing dynamics drove lower volumes, demand across core areas remains intact with continued momentum in aerospace and defense. We also continue to advance our optimization initiatives, including the Powder Saxonburg Center of Excellence, enabling us to maintain strong margins. In Gas Cylinders, pricing and continued advancement of operational execution drove stronger year-over-year results. Our optimization program announced last year remains on track with key milestones progressing as planned, and we expect to realize increasing benefits from these actions. Through the performance we have seen and improved visibility through the remainder of the year, we have the confidence to raise our full year 2026 earnings guidance, increasing our adjusted diluted earnings per share to a midpoint of $1.17.

As we look beyond 2026, we are increasingly confident in the momentum of the business and the drivers supporting a step-up in performance in 2027. Improving visibility across our end markets and the progress we are making on our operational initiatives position us well for a meaningful acceleration in earnings. We remain mindful of the broader geopolitical environment, but we see clear reasons for confidence based on specific drivers building across the business, including continued strength in aerospace and defense, the expected uplift in the SCBA replacement cycle and the expansion into higher-value applications such as space, supported by new product introductions. With that, I'll ask Steve to walk through the first quarter financial results and our updated outlook in more detail. Thanks, Andy, and good morning, everyone.

Let's turn to Slide 4 for a review of our first quarter 2026 consolidated financial results. Turning to our top line. Adjusted sales were $83.9 million, down 7.3%, consistent with the trends outlined earlier. Despite the lower sales level, adjusted EBITDA increased to $12.3 million, up 8.8% year-over-year with adjusted EBITDA margin of 14.7%, an improvement of 220 basis points. As shown on the bridge, lower volumes created a headwind in the quarter due to timing dynamics discussed earlier.

This was partially offset by pricing actions across the business, which outpaced inflation and supported strong margin performance. Importantly, we benefited from lower operating costs, along with early savings from our Riverside consolidation initiative within Gas Cylinders. Adjusted earnings per share was $0.27, up 17% year-over-year, demonstrating strong operating performance. From a cash flow perspective, cash from operations was an outflow of $4.1 million in the quarter, primarily driven by working capital, including inventory levels supporting our footprint optimization programs and the timing of receivables.

Net debt at quarter end was $42.9 million, resulting in leverage of approximately 0.8x, maintaining balance sheet strength and financial flexibility. Overall, the quarter reinforces the resilience of the business and robust execution. With that, let's turn to Slide 5 for a closer look at Electron's first quarter 2026 results. Sales for the quarter were $42.1 million, down 14.8% year-over-year, attributable to lower volumes across certain end markets.

This was largely driven by zirconium applications within industrial markets with some customer overstocking, along with the timing of high-end automotive wheels, consistent with the off-cycle dynamics we outlined previously, partially offset by continued strength in aerospace and improvements in certain defense-related applications. Despite the lower sales, gross profit year-over-year was $14.7 million, with gross margin increasing to 34.9%, up more than 500 basis points.

Adjusted EBITDA was $8.5 million with an adjusted EBITDA margin in excess of 20% Pricing actions in the period exceeded higher input costs, which along with continued operational discipline across the segment, resulted in significant productivity improvements compared to the prior year. Overall, Elektron delivered strong margin performance despite lower volumes, driven by pricing and operational execution, and we expect stronger revenues as well as continued progress across the segment's operational initiatives as we move through the remainder of the year.

With that, let's turn to Slide 6 for our Gas Cylinders first quarter 2026 results. Sales for the quarter were $41.8 million, up 1.7% year-over-year. Performance was driven by broadly stable volumes across the segment, continued strength in higher-margin specialty industrial applications and modest improvement in alternative fuels. This was partially offset by lower volumes in aerospace related to our branch relocation and seasonally slower SCBA demand, including the impact of the partial federal shutdown.

Despite the relatively stable sales level, gross profit increased to $7.2 million, with gross margins improving to 17.2%, up 360 basis points year-over-year. Adjusted EBITDA was $3.8 million, representing strong growth with EBITDA margins of 9.1%, an improvement of 280 basis points. This performance was driven by pricing discipline across the business, which exceeded higher input costs, along with continued operational execution, including some early benefit from the relocation of the Pilbara operation.

Overall, Gas Cylinders delivered margin expansion despite modest volume headwinds in the first quarter, and we expect continued margin enhancement throughout the year. Looking further ahead, we see multiple growth levers for Gas Cylinders, including the SCBA replacement cycle as well as space exploration as an emerging opportunity with activity developing across a range of customers and programs.

Let's now move to Slide 7 for an overview of our 2026 guidance update. We have raised our full year earnings guidance based on the strong start to the year and improved visibility across the business. For the full year, we are now projecting our revenue in the range of $355 million to $370 million, while increasing our adjusted EBITDA to $52 million to $56 million and adjusted earnings per share to $1.12 to $1.22.

The first quarter came in modestly ahead of our internal expectations and together with improving demand trends and visibility for the remainder of the year supports the updated guidance, including an implied midpoint of $1.17 while continuing to reflect a measured view of the broader macroeconomic environment. From a revenue perspective, the outlook continues to include timing dynamics in certain end markets, particularly within Elektron, which we expect to improve through the year.

At the same time, we continue to see strength in aerospace and defense, supporting margin resilience and earnings progression. Within Gas Cylinders, demand trend remains constructive with continued strength in specialty industrial applications and emerging opportunities in areas such as space exploration, supporting longer-term growth. We are making good progress on our productivity and optimization initiatives, which remain on track with benefits expected to build through the second half of the year.

Free cash flow guidance remains unchanged at $20 million to $25 million, reflecting ongoing investment in CapEx improvement programs and elevated inventory levels supporting our footprint consolidation initiatives. Given current geopolitical uncertainty, we are proactively monitoring global events as well as domestic tariff activity. To date, we have observed no impact on demand, and we have been successful in passing through increased costs. Overall, our updated guidance reflects a strong start to the year, improved visibility and a balanced view of the operating environment. With that, I will turn the call back to Andy to provide additional perspective on the outlook beyond 2026.

Thank you, Steve. Please turn to Slide 8. As we look beyond 2026, it is helpful to start with where we are today. At the midpoint of our updated guidance, we are operating at approximately $1.17 of adjusted earnings per share with improved margins and a portfolio that continues to perform well despite near-term timing dynamics in certain markets. From that base, we see a clear and credible path to a meaningful step-up in earnings in 2027, supported by a number of drivers already underway.

Starting with Elektron, the business will continue to benefit from strong and growing aerospace and defense demand, driven by the increasing use of precisely engineered magnesium alloys where lightweighting remains a key priority. Recent wins, including a new European aerospace defense application, reinforce our confidence in this trajectory. We are also seeing increasing momentum in the adoption of both of our Magtech heater solutions with interest building across a broader set of international markets as well as continued expectation for domestic flameless Russian heater add-on order in 2027.

This is complemented by the expected recovery in high-end automotive applications as prior off-cycle dynamics normalize. This reflects timing within the end customer portfolio and configuration options that incorporate our high-performance magnesium components. In addition, we continue to make progress with a number of new product development applications and specialty platforms, including areas such as passive chemical detection and medical field emergency solutions, where we are seeing growing customer interest.

Taken together, we expect Elektron to deliver steady mid- to high single-digit sales growth year-on-year, supporting a meaningful uplift in contribution to overall 2027 earnings. Turning to gas cylinders. We expect the return of the SCBA replacement cycle, including next-generation cylinders and larger municipal upgrades as a significant portion of the installed base moves into a more active replacement phase.

This represents a multiyear incremental opportunity for the segment. Within aerospace, demand continues to be supported by commercial build rates and program outlooks from large OEMs, providing a clear and visible growth profile as aircraft production levels increase. We are also seeing new momentum in space exploration applications, where our products are being specified across an expanding range of programs and platforms.

Along with hydrogen bulk gas, this is an area of higher growth within the portfolio with activity expanding across multiple customers as the market continues to scale. Taken together, we expect Gas Cylinders to deliver a stronger rate of sales growth, contributing to the overall step-up in earnings. Finally, across operations, we are progressing the productivity and optimization initiatives announced at the end of 2025, including footprint actions and our Center of Excellence programs.

These initiatives are expected to be largely completed by the end of 2026 with the benefits carrying into 2027. We expect these actions to contribute significant incremental EBITDA, supporting improved efficiency and margin expansion, as previously noted. Given the strength of these underlying drivers and the visibility we are building across the business, we see a clear and credible path to robust double-digit earnings growth in 2027.

This significant uplift reflects the progression from our 2026 base, supported by volume recovery, specific growth in higher-value applications and the full realization of our operational initiatives. Overall, we feel good about the momentum in the business and the opportunities ahead. Please turn to Slide 9. Before we take questions, let me briefly summarize the key highlights from the quarter. We delivered a strong start to 2026 with solid earnings growth and margin expansion driven by disciplined execution across the business.

We have raised full year earnings guidance based on clearer visibility with stronger revenues in the quarters ahead and improvement supported by operational enhancements and pricing. We see a clear and credible path to a meaningful step-up in earnings in 2027, supported by specific multiple drivers already underway. And we remain focused on executing our strategic review process with the objective of maximizing shareholder value. Overall, we are encouraged by the direction of the business and the opportunities ahead as we move through 2026 and position for a step-up in performance in 2027. I will now turn the call back to the operator for questions. Nikki, please go ahead.

[Operator Instructions] We'll take our first question from Steve Ferazani with Sidoti.

I appreciate the detail on the call. Certainly, very appreciative of the very early outlook on 2027. That's exceptionally helpful. I guess, Andy, the 2 big surprises to me are the strength in the Electron margins and the fact that you're able to grow gas cylinders year-over-year given the issues that you had outlined previously that were going to impact you in Q1.

So I just want to walk through those 2 specifically. Very rare to see that kind of margin improvement segment-wise that we saw in Elektron when revenue is declining. Can you walk us through the pieces on that? What drove such significant margin improvement? It looks like the highest quarterly margin you've had in that segment since I have to go back to it looks like 2022.

Yes. Thank you, Steve. We are very pleased with our Q1 and the performance in both the units. In our assessment also, it was a very nice result in Elektron. So we saw strong demand coming through in aerospace and defense. a nice mix of higher-value products. We saw strong operational performance in -- across most of the facilities. And that led to margins pushing above 20% despite the low values. So much to be pleased about there, especially overcoming that impact of the temporary softness in automotive high-performance wheels.

We should see higher revenues now coming through in upcoming quarters, and that helped us raise our guidance. So another nice result for Elektron. And then in cylinders, yes, revenues held up nicely, in fact, slightly higher. So Cylinders Q1 profitability significantly ahead of the prior year quarter run rates. Some of the positives to highlight on the revenue line were around specialty products, demand for the specialty gas cylinder range, for example, some incremental profit coming through from space. And then continued pricing improvements versus inflation were helpful on the margin line, along with the relocation of the Pilbara to Riverside operations. So a nice result for cylinders also.

What was the surprise to you coming into -- that you saw in the quarter in terms of volume? You pointed out a couple of times specialty gas cylinders. How much of that semiconductor, which we think is going to have a really nice couple of years here? Is that the key driver there? Or was it mixed?

Yes. So 2 key elements to the gas cylinders success on the specialty range. That is indeed related to semiconductors. Our larger cylinders are used to store expensive premium gases for the semiconductor market. And then we also have a range of smaller cylinders that gets used in the calibration market for testing cylinders and for monitoring testing sensors and for monitoring the performance of them.

So yes, it was a nice period for specialty gas. We also saw a little uptick in the CNG market, which was a slight surprise. I don't necessarily think I can yet point to a long-term trend of improvements in clean energy, but that will come through at some point, and it was nice to see those slightly higher volumes there.

Got it. Update on the Saxonburg facility. Where are you with that?

Yes. So in terms of the move to Saxonburg, that's the second of our relocation activities. So all of the atomization of powders and preparation of powders that was been done in Saxonburg [Indiscernible] has now moved across to our Saxonburg facilities. We do continue to run down our stock [Indiscernible], and that will continue for at least another couple of months as we ramp up in Saxonburg. So that project is on track and will be completed by the end of the year. We're more advanced with the first of our moves. That's in our cylinders business from Pomona to Riverside. The operations have now ceased in Pilbara. And since the start of the year, we've been ramping up production in Riverside. And all of those lines are now operational, albeit that we're still waiting for some product approvals to be completed. So we don't see the full benefits from that move until later in the year.

Got it. I guess for Steve, I think you noted the higher working capital part of that was the relocation. Should we see inventory levels coming down and be more of a benefit as the year goes on?

Yes. I think that's a fair comment. So first of all, I mean, in terms of the cash being a modest outflow in the quarter, I mean, that's not unusual for quarter 1. That often happens. But yes, inventories ticked up to $100 million, which is up about $8 million higher than it was at year-end. That is linked to holding higher levels for the 2 projects. I'd also say there's some pricing coming through in terms of certain materials, which in turn has an upward pressure on the inventory value. Very confident we'll be able to pass those on ultimately through price. So no concern there. But yes, it should come down. Our OWC is around about 30% of revenue at the end of last year. I think it was at 25%, 26%. And I would expect to get close to that as we get towards the end of the year. This year.

Excellent. That's helpful. Turning to the 2027 outlook. This is very helpful to us. Can you walk through sort of what -- because the earnings growth this year is pretty much predicated on margin improvement, but it sounds like in 2027, you see a real top line contributor. Andy, this early on, what gives you that confidence to put this out there? And any particular areas you want to point out?

Yes. Thank you. I'm glad that was helpful because we have heard from a number of shareholders over the last 2 months that they want to hear more clearly from us about the medium-term growth and earnings drivers. And the improved visibility in 2026 is also now giving us clearer insight into 2027. So if we to refer back to Slide 8, we can see some of those laid outs and why overall, we anticipate at least high single-digit sales growth in 2027.

So I want to emphasize first the strong outlook for our overall Defense and Aerospace segment, whether it's for alloys, flares, heaters, chemical kits or commercial aviation, demand is robust, and we'll see growth overall in 2027. And then perhaps to provide extra color on 3 areas where we strongly expect there will be tailwinds in 2027.

Firstly, Steve, there's this multiyear replacement cycle coming for SCBA that begins to impact in 2027. The major players in the industry are planning for this now, the cylinders and set age out and need replacing. Some of the largest municipalities in the country are looking to replace and upgrade One of them we know is in open discussions on this already for up to 10,000 sets.

Secondly, I'd like to talk to flameless Ration heaters, which we are increasingly confident will grow in 2027 internationally and domestically. There are positive buying signals that suggest an add-on order will lift domestic demand early next year, and we're currently quoting on 4 pieces of international business, an unprecedented level. And thirdly, normalized demand for magnesium alloy for those high-performance automotive wheels is scheduled to return around quarter 4 of this year as model years roll over.

We've recently learned that the uptake rate on the magnesium special option has increased in 2026. So we're actually seeing some recovery here coming in already. And of course, we have new product development and space as part of the picture as well. Now there will always be some surprises and headwinds. But suffice to say there's a good understanding we have of all of this and you combine it with the benefits of our operational excellence work. And that enables us to say we expect robust double-digit earnings growth in 2027.

Extremely helpful. And talking about the surprises or uncertainties, and you know you're watching geopolitical developments as we all are. But when I look at your end markets, not a lot of them should be impacted by elevated oil prices. Am I thinking about that right, at least from a demand standpoint?

Yes, you are. We're, of course, like everyone, conscious of the geopolitical situation and any wider macroeconomic consequences, and we'll continue to monitor this closely. But right now, we're not seeing anything concerning from a demand perspective. Indeed, we are seeing some indications of a future uplift related to certain defense products.

Now as Steve mentioned, we are seeing some inflationary costs come through on some materials. We see that on both metals and chemicals. But where we have customer contracts, we have quarterly pass-through adjusters, and we're seeing good acceptance of price changes both within those and on our spot order basis. And as you suggest, our product portfolio in general is biased away from consumer products tends to be rather resilient in the face of uncertainties. So overall, not a big factor for us right now.

Great. If I could just squeeze one last one in. On your final slide, you noted an active strategic review. Active might have been newly added or maybe I'm misreading it in terms of where this -- can you give any comments around the strategic review?

I'll just remind people that there were 3 conclusions associated with our strategic review in 2024. The sale of the Graphic Arts business, which is now complete, enhancing the performance of Gas Cylinders and Elektron and maintaining all strategic optionality. So with respect to the third strategic optionality, we do maintain our view that Gas Cylinders and Elektron have no material strategic synergies, and we're continuously assessing performance and market conditions to maximize shareholder value.

Over recent months, we have continued our readiness preparations. That's including work with various third parties, including investment banking and strategic growth advisers. But turning back to enhancing C cylinders and Electron, we've made strong progress over the last quarters, and I've talked in detail in my prepared remarks about how we are executing opportunities for both profitable growth and cost reductions as we move forward.

There are no more questions in the queue. At this time, I will turn the call over to CEO, Andy Butcher for final remarks.

Thank you, Nikki. Luxfer is well positioned with a resilient earnings profile and the trajectory for growth in 2027. We are executing with discipline and building momentum across the business, supported by improving end market demand and continued operational progress. The actions we have taken over the past several quarters are gaining traction and positioning the business for a meaningful step-up in performance. I want to thank our associates for their continued performance and commitment, and thank you for your continued support.

Thank you. This concludes Luxfer's First Quarter 2026 Earnings Call. A recording of this conference call will be available in about 2 hours. A link to a recording of this webcast will be available on the Luxfer website at www.luxfer.com. Thank you all for your participation. You may now disconnect.

Good morning. My name is Nikki, and I will be your conference operator today. Welcome to Luxfer's Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] Now I will turn the call over to Kevin Grant, Vice President of Investor Relations and Business Development at Luxfer. Kevin, please go ahead.

Thank you, Nikki, and good morning, everyone. Welcome to Luxfer's Fourth Quarter and Full Year Earnings Conference Call. This morning, we'll be reviewing Luxfer's financial results for the fourth quarter and full year ended December 31, 2025.

I'm pleased to be joined today by Andy Butcher, our Chief Executive Officer; and Steve Webster, our Chief Financial Officer. Today's webcast is accompanied by a presentation that can be accessed at luxfer.com. Please note, any reference to non-GAAP financials are reconciled in the appendix of the presentation. Before we begin, a friendly reminder that any forward-looking statements made about the company's expected financial results are subject to future risks and uncertainties. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Please refer to the safe harbor statement on Slide 2 of today's presentation for further details.

During today's call, we'll be providing adjusted fourth quarter and full year 2025 financial results, excluding the recently sold Graphic Arts business and 2024 legal recoveries.

Now let me introduce Luxfer's CEO, Andy Butcher. Please turn to Slide 3. Andy, please go ahead.

Thank you, Kevin, and good morning, everyone. Thank you for joining us. As we close out 2025, I am pleased to describe Luxfer's performance for the year as successful, disciplined and it's even better than we expected at the outset. This sustained positive earnings growth reflects the traction of the operating model we have built over the past several years. I'm particularly pleased with the way the organization navigated external pressures during the year, including exchange rate volatility while continuing to execute at a high level.

For the full year, we again delivered sales growth while maintaining a consistent operating leverage and strong profitability. Adjusted EBITDA totaled $51.9 million, up 4% and adjusted earnings per share was $1.11, up 12% year-over-year, reflecting our ability to drive earnings through consistent execution and portfolio positioning. We also generated strong free cash flow of $26.2 million and continue to distribute capital to shareholders.

Results for the year were driven primarily by sustained momentum in the Elektron business, particularly across defense and aerospace applications. Demand for our UGR-E and MRE platforms, magnesium aerospace alloys and certain specialty industrial applications gained in strength as the year progressed and served as a catalyst for full year results. Indeed, the Magtech Solutions team overcame capacity constraints during the year to deliver record volume levels, including the benefit of an add-on to normal annual demand.

Within Gas Cylinders, performance reflected variability in certain end markets, including clean energy, health care and first response programs, although again, specialty industrial applications showed improvements. Importantly, the team continued strengthening the underlying cost structure and improving operational efficiency. Across the business, we continued advancing our optimization initiatives, including progress on the Riverside Center of Excellence and the Powders Saxonburg Center Of Excellence. These initiatives are designed to streamline the footprint, simplify operations and enhance long-term efficiency. While the financial benefits are expected to begin materializing in late 2026, this year marks meaningful execution progress against these structural priorities.

To summarize, 2025 demonstrated our ability to execute, manage the portfolio effectively and enhance earnings quality and profitability amid uneven demand conditions, reinforcing again the strength of Luxfer's core operations and value creation strategy.

Finally, as previously communicated and consistent with our focus on long-term shareholder value, following the completion of the accelerated strategic review, the Board has continued to evaluate strategic alternatives. This evaluation remains ongoing.

Before turning the call over to Steve, I would like to thank our associates across the organization for their commitment and execution throughout the year. Their efforts were critical to delivering these results.

With that, I'll ask Steve to walk through the fourth quarter and full year financial results in more detail.

Thanks, Andy, and good morning, everyone. Let's turn to Slide 4 for a review of our fourth quarter and full year 2025 consolidated financial results. Looking at the fourth quarter, adjusted sales were $90.7 million, down 5.5% year-over-year. As shown in the sales bridge, pricing actions contributed $1.6 million and foreign exchange provided a $1.1 million tailwind. These positives were more than offset by an $8 million headwind with lower demand in clean energy, automotive and countermeasure flares.

For adjusted EBITDA, positive pricing was more than offset by the impact of lower volumes, resulting in a reduction from last year's quarter. Despite the lower sales level, adjusted EBITDA for the quarter was $13 million, ahead of our expectations with an adjusted EBITDA margin of 14.3%. For a full breakdown, please see the detailed waterfall in the appendix on Slide 12.

Now turning to the full year. Adjusted sales were $371.2 million, an increase of 2.5%. Adjusted EBITDA totaled $51.9 million, up 4.2% with an adjusted EBITDA margin of 14%, representing an improvement of 25 basis points compared to 2024. Adjusted earnings per share were $1.11, an increase of 12.1%. Cash from operations totaled $33.9 million, supporting a $9.9 million reduction in net debt to $31.1 million. We ended 2025 at approximately 0.6x leverage, providing significant balance sheet strength and strategic flexibility.

With that, let's turn to Slide 5 for a closer look at Elektron's fourth quarter and full year 2025 results. Turning first to the fourth quarter. Sales were $46.9 million, down 1.3% year-over-year, reflecting lower activity in certain select end markets. Despite the modest reduction in sales, we were pleased that adjusted EBITDA margin remained at a high level of 19.6%, supported by favorable mix and continued focus on higher-value aerospace and defense programs. For the full year, Elektron made a meaningful contribution to overall results. Sales were $196.4 million, up 11.6% versus the prior year, while adjusted EBITDA totaled $36.9 million, an increase of 16%. Adjusted EBITDA margin expanded to 18.8%, reflecting the continued weighting towards higher-margin applications. Full year performance was supported by sustained demand in magnesium aerospace alloys, which remained a constant contributor throughout 2025. In addition, demand for MRE and UGR-Es also remained at elevated levels during the year, including the benefit of an add-on to normal annual demand, resulting in record sales volumes. Taken together, these dynamics underscore the earnings power of the Elektron business and its ability to perform across varying demand environments.

With that, let's turn to Slide 6 for our Gas Cylinders fourth quarter and full year 2025 results. Looking at the fourth quarter, sales were $43.8 million, down 9.7% year-over-year, driven primarily by lower SCBA and alternative fuel volumes. Despite the lower sales level, gross margin improved to 17.4%, reflecting favorable mix and operational execution.

Adjusted EBITDA for the quarter was $3.8 million, with profitability holding relatively stable. For the full year, Gas Cylinders sales were $174.8 million, down 6.2% versus the prior year, largely reflecting lower volumes across the first response and health care end markets.

Adjusted EBITDA for the year was $15 million with an adjusted EBITDA margin of 8.6%. While volumes were lower, margins were supported by favorable mix, strong pricing actions and continued operational efficiencies. Throughout the year, the business benefited from improved activity in higher-margin specialty industrial applications, which helped offset continued softness in clean energy and variability in health care. Full year comparisons were also affected by elevated U.S. Air Force deliveries in the prior year. The results for the year included higher legal and operational expenses concentrated in the period, including costs associated with one-off employment-related matters and certain customer accommodations. Overall, Gas Cylinders 2025 performance reflects solid execution through a period of lower demand with actions taken during the year, positioning the business to deliver higher margins and stronger profitability as volumes improve.

Let's now move to Slide 7 for an overview of our 2026 guidance. We expect adjusted sales to be down mid-single digits versus 2025 in a range of $350 million to $370 million. The expected year-over-year revenue pressure reflects several timing dynamics, including the expected absence of an MRE add-on, temporary softness in high-end automotive applications, short-term headwinds within space programs and some pull forward into 2025. That said, we expect continued strength in high-margin core aerospace and defense markets.

Adjusted earnings per share are expected to be in the range of $1.05 to $1.20, with a midpoint of approximately $1.12. Adjusted EBITDA is expected to be in the range of $50 million to $55 million, reflecting continued margin stability and later in the year, the benefit of action currently underway at our Riverside Center of Excellence.

Turning to cash and capital deployment. We expect cash flow of approximately $20 million to $25 million in 2026. Capital expenditures are expected to be above normal levels between $15 million and $20 million, primarily supporting optimization initiatives, growth opportunities and productivity improvements. We expect a tax rate of approximately 23%, interest expense of $3 million to $4 million and net leverage at approximately 0.7x. As previously mentioned, approximately $2 million of orders were pulled forward from quarter 1 of 2026 into quarter 4 of last year, ahead of the Pomona to Riverside optimization initiative. And we note the equipment moves and commissioning during quarter 1 will cause inefficiencies. As a result, combined with normal seasonality and tougher first quarter comparisons, we expect quarter 1 earnings to be softer than the prior year. Regarding FX sensitivity, the average GBP exchange rate in 2025 was approximately [ $1.32 ]. Our 2026 planning assumption is [ $1.35 ], which represents an approximate $0.02 headwind to earnings on a constant currency basis. In addition, our 2026 guidance excludes nonrecurring advisory costs associated with the Board's ongoing evaluation of strategic alternatives, which we expect to be reflected as onetime expenses during the year.

Overall, our outlook reflects thoughtful planning and the structural actions already underway. And we believe we are well positioned to navigate 2026 while maintaining strong margins and a robust balance sheet.

With that, I'll turn the call back to Andy.

Thank you, Steve. Please turn to Slide 8. Luxfer remains sharply focused on sustained profitable growth. Over the past several years, we have strengthened the portfolio, streamlined our footprint and reinforced our operating model to perform through the macroeconomic cycles while improving the long-term earnings profile of the business. Our strategy centers on specialized value-added niche applications and disciplined execution, underpinned by the Luxfer Business System, which drives innovation, commercial excellence and operational rigor. We expect to deliver steady performance in 2026, supported by core aerospace and defense demand and the structural actions being implemented across our footprints. While temporary off-cycle demand shifts moderate short-term growth, our streamlined cost base positions us to convert any incremental volume into improved earnings. At the same time, we are advancing new product introductions within Elektron, including specialized safety and defense-oriented applications, while also launching next-generation Gas Cylinder products into the SCBA and space arenas. Looking ahead to 2027, several dynamics are expected to become more favorable. We anticipate the beginning of a new multiyear SCBA replacement cycle, the return of high-end automotive platform activity as model cycles reset and the potential for another MRE add-on year. Combined with the full benefit of efficiency initiatives already underway, these factors position the business to translate revenue growth into higher profitability. In short, we believe Luxfer is positioned to navigate 2026 while maintaining margin strength and building toward a more favorable growth environment in 2027.

With that context, I'll turn to our closing slide to summarize today's key messages. Please turn to Slide 9. Our value creation strategy is grounded in disciplined execution while also positioning the business to capitalize on evolving end market trends. In 2025, we delivered another year of earnings growth, margin expansion and strong cash generation, reinforcing the quality of the portfolio. Elektron's defense and aerospace platforms were key drivers of performance, demonstrating the strength of our higher-value applications. Gas Cylinders navigated program timing and end market variability while executing pricing actions and continuing to strengthen its cost structure and competitive position. Structural actions across the footprint are beginning to enhance efficiency and position the business to perform through changing macroeconomic conditions and shifting customer demand. As we look ahead, the headwinds shaping 2026 are primarily timing related, not structural. As those factors normalize, we see a clear pathway to renewed and accelerated top line growth and earnings expansion. Overall, we remain confident in Luxfer's positioning, the durability of our earnings profile and our ability to create long-term shareholder value.

I will now turn the call back to the operator for questions. Nikki, please go ahead.

[Operator Instructions] we'll take our first question from Steve Ferazani with Sidoti.

This is Justin on for Steve Ferazani. Starting on fourth quarter performance, what is driving the continued strength in Elektron margins?

Yes. Thank you, Justin. We are very pleased with our Q4 performance and indeed, the 2025 result. There were good demands throughout the year through our more differentiated products, aerospace, defense, especially magnesium alloys, magnesium heaters, specialty, oil and gas, all of those supported the strong margins in the Elektron, along with strong manufacturing output and led to that adjusted EPS that we saw for the full year, up 12% above $1.10.

Very helpful. And as a follow-up to that, how should we think about Elektron margin trajectory in 2026? Do you anticipate margins to be sustained at current levels? Or is there a potential for further expansion?

This is Steve. Yes, I mean, if we look at Elektron margins, we always talk about an aspirational EBITDA margin of around 20%. And you can see we've been approaching that in 2025, helped by some very strong mix, as Andy has mentioned. I would imagine the margin to continue around about that percent, that 20% mark. Clearly, though, the mix can be a bit variable. But I think with the combination of some of the programs we're putting in place in terms of the restructuring programs, a 20% margin remains the target. And I think we'll be very close to that as we continue throughout the year.

You perhaps hinted there, Justin, this is Andy, about what might drive an upside scenario. So not currently modeled in our guidance, but some of the upsides could come from overperformance in core defense and aerospace, maybe a military add-on for FRH, busy hurricane season. And the cost -- on the cost side, of course, we're working on that restructuring project. So we saw -- if we saw overall less disruption there or a faster realization of benefits, those would all be potential upsides, not currently included in our guidance. So we'll be very focused on maximizing the performance in both the business units.

Maybe turning to the Gas Cylinders segment. It was noted that benefits from the North American gas cylinder plant consolidation and the magnesium powders plant investment are expected in late 2026. Can you provide any additional color on the impact of these benefits?

Sure. Yes. Thank you. So as a reminder, we announced last summer that we would be relocating the aerospace and life support product lines in Pomona, California to our Riverside, California facility. And the savings there are up to $4 million once fully executed. Right now, we've gone through the equipment moves. Those started in mid-December and will be substantially complete by the end of the quarter, and we're already seeing some initial limited production underway there. The other program is our Elektron Powder Center of Excellence, where currently, we're operating 2 manufacturing locations in the U.S. for magnesium powder and we've identified and are actioning an opportunity there to invest very significantly in our Saxonburg site, over $6 million of -- worth of CapEx. That project, we also expect to complete before the end of 2026 and the efficiency and automation benefits there are worth around $2 million. That's included in our guidance.

Okay. Great. Maybe looking ahead to 2026 and beyond, I know you briefly mentioned earlier about new product developments. Maybe could you elaborate on those?

Yes. So in our Elektron business, let me give an example of some of our magnesium solutions products during the course of the year. So building on the success of our commercial LeadCheck detection product, we are already putting into the market now a detection product for organophosphates. And that's planned to be followed later in the year with some detection products around nerve agents such as Novichok.

And then on the Cylinder side of the business, we have a range of next-generation products. I was lucky enough to visit one of our SCBA customers recently, and they're very excited about the potential of our next-generation products there. We've also got a new range being introduced for the space market later in the year.

Exciting. And how has adoption trended with the detection product that you've put into market?

Yes. So LeadCheck is a relatively small commercial product that's sold through online and through some of the big box stores. And that's used to help people identify lead that might be present in house paint before they go through a restructuring program. So this is small, low million dollars worth of volume, but it's the start of a platform, a range of new products for Magtech Solutions.

Got it. Now turning to capital allocation. Given net leverage well under 1x, can you discuss 2026 capital deployment priorities?

Yes, it's Steve again. I think you'll have seen from the guidance slide that the capital expenditure projection is elevated for '26. We spent around $8 million in '25, it represents most of maintenance CapEx. Going into 2026, we're projecting $15 million to $20 million. I would say 1/3 of that is down to the restructuring Centers of Excellence projects that Andy has mentioned. So that's partly the reason for elevated CapEx. We've also got some exciting growth programs that we're looking to fund as well. So number one, accelerated or increased CapEx Otherwise, certainly, in terms of dividend program, that continues at a similar level. We have a normal level of share buyback, which typically runs at around $2.5 million annually. We would maintain that. We also have an opportunity to do additional opportunistic buybacks, should the circumstances arise, we have approval from the Board for that. And we also maintain a program of looking at bolt-on type M&A, both centrally with myself and also the business units are tasked with looking at opportunities. So I'd say it's fairly a normal expectation in terms of what we normally do.

Got it. And in terms of that M&A, how are valuations and spaces you might be looking? And maybe if you could touch on any flavor for the size of businesses you might be looking at?

Yes. So this is Andy. So we operate an M&A framework that we call SOAR, and that's applied in all of the business units, and they're tasked with looking at a range of synergistic potential M&A activity that would support our overall strategy of profitable growth. But typically, these are -- stress, these are bolt-on acquisitions up to $80 million, I might say. Thanks, Justin.

There are no more questions in the queue. At this time, I will turn the call over to CEO, Andy Butcher for final remarks.

Thank you, Nikki. Luxfer is well positioned with a durable earnings profile and clear priorities for value creation. Our focus remains on disciplined execution and maximizing shareholder returns. I want to thank our associates for their performance throughout the year, and thank you for your continued support.

Thank you. This concludes Luxfer's Fourth Quarter and Full Year 2025 Earnings Call. A recording of this conference call will be available in about 2 hours. A link to a recording of this webcast will be available on the Luxfer website at www.luxfer.com. Thank you for your participation. You may now disconnect.

Good morning. My name is Angela, and I will be your conference operator today. Welcome to Luxfer's Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Now I will turn the call over to Kevin Grant, Vice President of Investor Relations and Business Development at Luxfer. Kevin, please go ahead.

Thank you, Angela, and good morning, everyone. Welcome to Luxfer's Third Quarter 2025 Earnings Conference Call. This morning, we'll be reviewing Luxfer's financial results for the third quarter ended September 28, 2025. I'm pleased to be joined today by Andy Butcher, our Chief Executive Officer; and Steve Webster, our Chief Financial Officer. Today's webcast is accompanied by a presentation that can be accessed at luxfer.com. Please note, any references to non-GAAP financials are reconciled in the appendix of the presentation.

Before we begin, a friendly reminder that any forward-looking statements made about the company's expected financial results are subject to future risks and uncertainties. We undertake no obligation to update any forward-looking statements, whether a result of new information, future events or otherwise. Please refer to the safe harbor statement on Slide 2 of today's presentation for further details.

During today's call, we'll be providing adjusted third quarter 2025 financial results, excluding the recently sold Graphics Arts business and 2024 legal recoveries. Now let me introduce Luxfer's CEO, Andy Butcher. Please turn to Slide 3. Andy, please go ahead.

Thank you, Kevin, and good morning, everyone. Thank you for joining us. The third quarter demonstrated strong execution and the earnings power of our core business. We continue to shift our mix toward higher-value markets where Luxfer differentiates through innovation and performance, particularly in defense and aerospace. These programs build on our proven technical capability and trusted position with key customers. Adjusted earnings per share was $0.30, and adjusted EBITDA was $13.6 million for an adjusted EBITDA margin of 14.6%. Margin expanded sequentially, supported by favorable mix in key end markets. Elektron remains a clear revenue and profit engine. Aerospace led performance as foundries worked through deep backlogs and higher defense spending, supporting new aircraft builds.

Our magnesium heater platforms have been sizable contributors throughout the year, complemented by consistent activity in commercial powders and flare programs and improved demand in oil and gas applications. Gas Cylinders delivered in line with our expectations. SCBA volumes were higher in the quarter and aerospace inflatables increased significantly versus both the prior year and sequentially. As anticipated, market pressure in clean energy persisted, but the team offset much of this with strength in first response and aerospace helping to sustain a healthy mix.

Cash generation was strong in the quarter, providing approximately $10 million of free cash flow, reflecting disciplined working capital management. We also completed the sale of Graphic Arts at the beginning of the quarter, sharpening focus on our core businesses and enabling a more concentrated allocation of resources towards higher-margin opportunities. And we were pleased to announce the addition of Stewart Watson to our Board with heavy experience in the aerospace and defense industry. Footprint optimization is advancing through our Centers of Excellence program. The Pomona to Riverside composite cylinder relocation announced last quarter remains on track. This automation-led initiative will capitalize on our technology and is expected to deliver up to $4 million of annualized savings when fully ramped.

This quarter, we've announced plans to establish a Powders Center of Excellence in Saxonburg, Pennsylvania next year, which will concentrate operations to improve throughput and service for both our growing defense and specialty industrial customers while providing approximately $2 million of additional annualized savings. In short, the third quarter underscores our portfolio quality, operational resilience and our ability to align the business to higher-value sectors for stronger profitability. With that, I'll hand over to Steve to take you through the financials and our raised 2025 guidance. Steve?

Thanks, Andy, and good morning, everyone. Let's turn to Slide 4 for a review of our consolidated financial results. In the third quarter, sales were $92.9 million, up 1.6% year-over-year, reflecting continued strength in defense and aerospace, partially offset by softer demand in certain gas cylinder end markets. Adjusted EBITDA was $13.6 million, up slightly from last year, with margins at 14.6%. Profitability was driven primarily by Elektron, where favorable mix and higher volumes in defense and aerospace, particularly in MREs and other specialty programs, supported strong margins. Pricing improvements in Gas Cylinders also contributed, helping to offset softer industrial and automotive demand.

Adjusted earnings per share was $0.30, an increase of 11% year-over-year. Cash generated from operations was $11.8 million, reducing net debt to $37.3 million, resulting in a leverage of 0.7x. Year-to-date, sales have increased 5.3% to $280.5 million, driven by strength in defense, aerospace, space exploration and steady SCBA demand. Adjusted EPS improved 18.6% to $0.83, reflecting higher margins from mix improvement and disciplined execution across both segments.

Turning to the quarterly prior year sales bridge on the right. Positive price action, largely in Gas Cylinders contributed $2.1 million. Volume mix declined by approximately $0.8 million with softer demand in clean energy and automotive markets, partially offset by defense and aerospace. For our adjusted EBITDA walk, higher pricing and inflation recovery together added approximately $2.9 million, complemented by a $0.6 million benefit from favorable volume mix driven by Elektron. These gains were offset by $3.4 million in planned investments to support defense and aerospace programs as well as higher operating expenses primarily related to overhead costs. For a full breakdown, please see the detailed waterfall in the appendix to Slide 12. Overall, the quarter demonstrated strong execution, steady profitability and mix improvement across our core markets.

With that, let's move to Slide 5 for a closer look at Elektron's quarter 3 performance. Q3 marked another strong quarter for Elektron, powered by ongoing defense and aerospace momentum, driving higher volumes and positive mix. Sales were $50 million, up 2.5% year-over-year, reflecting elevated demand in higher-value programs. This, in turn, delivered adjusted EBITDA of $9.9 million at a 19.8% margin, up 160 basis points from last year. Defense and aerospace remained the primary growth drivers, supported by steady demand across major programs and further strength in core platforms such as flameless heating.

In transportation, commercial aerospace-related alloy demand stayed firm, offsetting lower activity in auto catalysis. Specialty Industrial was softer this quarter due to weaker industrial demand in zirconium, partially offset by improved activity in oil and gas applications. Looking ahead to strengthen future efficiency, I'm pleased that we are establishing a powder center of excellence. This initiative is expected to deliver approximately $2 million of annualized savings while enhancing quality, throughput and service for defense and specialty customers. Overall, Elektron continues to execute well with elevated performance in its core markets, strong cash conversion and sustaining margins near 20%.

With that, let's turn to Slide 6 for our Gas Cylinders results. Gas Cylinders performance was stable overall with sales of $42.9 million, up slightly year-over-year, driven by steady demand in SCBA and helping offset broader market softness in clean energy. Adjusted EBITDA was $3.7 million with margins holding near 9%. While mix and volume were lower in several end markets, increased pricing and ongoing cost control helped maintain profitability in line with expectations. Within the segment, SCBA remained the primary driver, continuing to deliver stable demand for first response and defense applications.

Aerospace inflatables demand remained solid, though space shipments were lower this quarter due to expected off-cycle timing following a strong first half. Importantly, we still view space exploration as a meaningful long-term growth opportunity. Our Pomona to Riverside Center of Excellence remains on track. This automation-led consolidation is expected to deliver up to $4 million in annualized savings while leveraging technology for long-term efficiency gains.

Let's now move to Slide 7 for a review of our updated 2025 guidance. We have raised our full year guidance, reflecting strong performance from the first 3 quarters of the year. We have increased the adjusted EPS range to $1.04 to $1.08, up from $0.97 to $1.05 from last quarter. Adjusted EBITDA has been refined to a tighter range of $50 million to $51 million, reflecting increased confidence in our outlook. We are maintaining our free cash flow guidance of $20 million to $25 million and continue to expect low single-digit sales growth versus 2024.

Momentum remains centered in defense and aerospace, driven by sustained demand for defense programs and ongoing aerospace build rates, the latter supported by solid backlog visibility. That said, we continue to see some softness in automotive within Elektron and alternative fuels within gas cylinders, and these are reflected in our guidance ranges. Operational discipline remains strong with consistent performance as defense production levels stabilize following elevated early year activity.

From a risk management standpoint, the direct impact from tariffs remains modest, and our teams continue to monitor and manage our supply chains. With 1 quarter to go, we're focused on closing out and positioning our investments in innovation towards markets where we have the greatest opportunities. Now I'd like to turn the call back to Andy.

Thank you, Steve. Please turn to Slide 8. Our Luxfer Business System provides a clear structured framework to innovate, drive efficiency and stay agile, always focused on meeting customer needs and delivering profitable growth. This slide highlights how we differentiate through the Luxfer Business System and our leadership in strategic markets such as aerospace and defense. At Elektron, our advanced magnesium alloys remain a key competitive advantage. These lightweight materials deliver high strength and heat resistance at roughly 2/3 the weight of aluminum, improving range, payload and efficiency for our customers' most demanding platforms.

We use operational excellence to underpin this success. We are a trusted material supplier to major OEM programs with precision manufacturing and process control that ensure mission-critical reliability. Our performance advantage lies in lightweighting that directly enhances mobility, response time and equipment handling in the field, whether it's a lighter gearbox housing that improves aircraft performance or a rugged magnesium component that reduces weight in, for example, night vision systems. Our materials provide measurable advantages where strength, precision and endurance matter most. And finally, we are seeing proven results in higher revenues. The Luxfer Business System continues to drive performance, quality and innovation, positioning us for sustained growth in core markets, where we are consistently winning new opportunities.

Now please turn to Slide 9. As we close, I want to take a step back from operations and highlight how we are driving value creation for Luxfer shareholders. Our strategic approach is centered on focus and prioritization. We are aligning the business around specialized high-value products and markets where we hold leading positions and can sustain pricing power. We are strengthening customer partnerships across defense, aerospace and key industrial programs by building deeper, longer-term relationships that provide both stability and growth opportunity.

Financially, we maintain a healthy balance sheet, investing selectively and quickly for growth and generating consistent free cash flow to support shareholder returns. Our operational optimization continues through the Centers of Excellence, which will deliver tangible cost savings and improved capital efficiency across both segments. We are also evaluating nearer-term opportunities to drive additional value, including portfolio simplification, operational partnerships and technology-driven growth.

We remain focused on driving greater operational performance while also monitoring conditions to maintain full optionality and preparation to take strategic action at any time to maximize shareholder value. Ultimately, we have sharpened our execution focus, strengthened our balance sheet and created the foundation for sustained earnings growth and long-term stand-alone value creation. We'll now turn the call back to the operator for questions. Angela, please go ahead.

[Operator Instructions] And we'll go to Steve Ferazani with Sidoti.

Andy, I guess the surprise to me was the strength in Elektron given you were comping to what was by far the strongest quarter of the year last year for Elektron. I know you had some pull forwards in the year ago quarter. I'm trying to figure out how you even top that revenue and the significant margin expansion. Can you sort of walk through what led to that given what was clearly a challenging comp?

Yes. Thanks, Steve. It was a very nice result in Elektron. The strong demand continued in both aerospace and defense. We match that with increased orders. We also saw slightly better order intake in zirconium. The mix was nice with some higher-value products, pushed our margins up towards 20%. So yes, broad-based strength in Elektron, very pleased about that.

Can you talk a little bit about pricing and costs and how much that could be reflected in those margins? Or is it purely mix that we're looking at?

It was mainly a mix for Elektron, a nice mix around those aerospace and defense products, continuing strength in the MRE heaters, which have been good all year with that baseline FRH demand, the add-on order and some exports. The pricing came mainly from the cylinders part of the business, where we were pleased with the improvements we were able to make there.

Yes. Turning to Gas Cylinders a little bit. I mean you've highlighted the weakness in alternative energy that we were expecting, but you've offset a lot of that this year. Can you talk a little bit about commercial space market and what you think the opportunities ahead are, which seems to be really helping out?

Yes. The market for clean energy is down at the moment, not too much demand for CNG and hydrogen. Still winning some nice orders. But as you've said, we've been able to repurpose much of our large cylinder capacity to the space exploration market, which has been a nice win for us. Sales in Q2 were up on a strong Q1. And although Q3 was lower, that was expected, and we're now ramped up again with strong order visibility for Q4. Space exploration is a demanding application, and we operate at tight tolerances and we achieve good margins. And we believe we excel in that field and the market growth rates are high.

Okay. We know the ongoing trend consolidation on Gas Cylinders with relocation to Riverside you've said $4 million in annual savings. Now if you can provide a little bit more detail on the Powders Center for Excellence. You talked about that being $2 million in annual cost savings. I guess 2 questions here. One, if you could talk a little bit more about what's going on with the powder side because it's the first, I think I'm hearing about it. And then two, what's the timing on this net $6 million in cost savings between those 2 moves?

Yes. So talking about the Powders Center of Excellence first. We currently operate 2 manufacturing locations in the U.S. for production of our magnesium powder. So as part of continuing our Centers of Excellence program, we've identified and we're actioning an opportunity to invest significantly in our Saxonburg site. We'll invest over $6 million of CapEx there to create a greatly improved footprint that will support our customers' needs for growth for high quality, tighter particle tolerance and also bring those efficiency and automation benefits worth around $2 million a year.

And in terms of timing, we intend to complete the project over the course over the next year. With the Riverside Center of Excellence, the move from Pomona, that project was announced last quarter. That's underway. And we broke ground on that last week in Riverside, pouring some foundations. And so we'll start to see that ramp through 2026.

Okay. I know we won't hear from you again until the next conference call will be the 4Q when you're going to -- and I know it's way too early to start guiding for 2026. But are you seeing pockets for growth in 2026? Or is that going to be more of a margin story as you see things right now?

Yes. I think you're right. It's a little early to be talking about 2026. We will give our guidance for that at the end of our full year earnings call. I do believe that we'll be seeing some areas of growth as part of that. And of course, we just covered the cost reduction programs that we're working on as well.

There are no more questions in the queue. At this time, I'll turn the call over to CEO, Andy Butcher for final remarks.

Thank you, Angela. We are very proud of the progress the team delivered this quarter, and we remain focused on delivering long-term shareholder value. I'd like to close by thanking the entire Luxfer team for their exceptional execution and commitment, and thank you for your continued support.

This concludes Luxfer's Third Quarter 2025 Earnings Call. A recording of this conference call will be available in about 2 hours. A link to a recording of this webcast will be available on the Luxfer website at www.luxfer.com.