Good morning. My name is Madison conference operator today. Welcome to Luxfer's First Quarter 2025 Earnings Conference Call. All lines have been placed on mute. After the speakers’ prepared remarks, we’ll hold a question-and-answer session. 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, Madison, and good morning, everyone. Welcome to Luxfer's First Quarter 2025 earnings conference call. This morning, we'll be reviewing Luxfer's financial results for the first quarter ended March 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 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 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 first-quarter 2025 financial results, excluding the 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. We are very pleased with our first quarter performance. Our team delivered adjusted earnings per share of $0.23, up from $0.20 a year ago, and maintained net debt at approximately $42 million or 0.7x leverage. Sales revenues grew significantly, led by Elektron and driven especially by off-cycle demand in flameless ration heaters, as well as our group ration UGR-Es, reflecting higher 2025 demand from our defense applications as well as commercial customers replenishing inventories. We also saw a continuation of the rebound in defense flares and aerospace, and our overall order books as we left the quarter were elevated by 12%. We'll dive deeper into the encouraging UGR-E outlook later as a flagship example of our Luxfer Business System in action. The planned divestiture of our Graphic Arts business is nearing completion and remains on track to close by the middle of the year, which will enable us to sharpen our focus on higher-margin growth opportunities. I'm also pleased to announce that an order has been secured for our first bulk gas transportation system in Europe, a milestone that underscores Luxfer's expertise in large-scale compressed gas handling as we expand our international gas solutions portfolio. Turning to tariffs. Through a variety of proactive and reactive steps, we have effectively avoided or neutralized incremental direct duty costs as of now. This insulation from recent tariff actions reflects deliberate forward-looking activities across the business. Based on the work of the past several years, there are fully approved reciprocal tariff exemptions covering our electron alloys and most of our zirconium imports. Nearly all cylinder trade within North America benefits from USMCA protections, and we have additionally used duty drawback programs and local sourcing to limit cross-border exposure. Combined with some minor price changes where necessary, I'm pleased to say that these strategies have positioned us to minimize direct reciprocal tariff impacts today. That said, we remain attentive to evolving macro risks. We are very closely monitoring ongoing developments around rare earth supply channels from China and broader trade policy dynamics. Furthermore, should new duties emerge, we are prepared to adjust our sourcing, pricing, and operational strategies as needed, and our heavy weighting in defense, first response, and aerospace continues to position us well against any broader economic slowdown. Overall, Q1 demonstrates that Luxfer can execute effectively in a dynamic environment. With a strengthened backlog, we remain encouraged by our internal performance and the near-term outlook. With that, I'll hand the call over to Steve, who will provide details of our financials and share our 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 first quarter, sales were $90.5 million, up 8.9% year-over-year on solid end market demand. Adjusted EBITDA rose 9.7% to $11.3 million, delivering a 12.5% margin. We generated $5.1 million of cash from operations, a $1.5 million increase, and maintained a low net debt of $41.9 million. On the right, our sales bridge shows that volume and mix contributed $7.2 million driven by off-cycle defense pull-ins for MREs and flares, plus an improving aerospace backlog. Pricing added $0.5 million, reflecting SCBA escalators and selected customer increases, partially offset by repricing in Elektron due to certain lower input costs. FX was a modest $0.3 million headwind. For our adjusted EBITDA walk, net deflation added $0.6 million. Volume and mix and pricing contributed $3.7 million and $0.5 million, respectively, while adverse factors of $3.7 million largely reflect $1.7 million of transitional production costs and $1.2 million of elevated logistics and ongoing investments. For a full breakdown, please see the detailed waterfall in the appendix on Slide 12. Now let's turn to Slide 5 for a detailed review of Elektron's first-quarter financial performance. Our Elektron segment harnesses proprietary magnesium and zirconium platforms in markets where higher performance is critical. We serve customers who demand deep technical expertise, whether that's ultra-lightweight alloys that extend aircraft range and cut fuel burn, countermeasure flares and self-heating MRE powders that protect and sustain personnel in extreme conditions, or zirconium-based catalysts and oxides that drive precision in advanced manufacturing, clean energy solutions, and critical healthcare applications. By focusing on high barrier defense and aerospace-driven end markets, Elektron commands premium pricing and high margins, powering sustained growth as global demand for safety, reliability, and performance continues to climb. In the first quarter, Elektron sales rose to $49.4 million, up 31% from $37.7 million a year ago. Adjusted EBITDA increased to $8.7 million, and our EBITDA margin expanded to 17.6%, with a 120 basis points improvement versus the prior year. Growth was broad-based across our core end markets. Defense, First Response, and Healthcare led the way, up 76%. Customers continue to restock flameless ration heaters and Meals Ready-to-Eat products, and demand for our related UGR-E product is still increasing. We also saw a meaningful pickup of demand for both our magnesium aerospace alloys and magnesium powders for countermeasure flares as customer manning and production issues began to ease across both market sectors. Alloys lifted our transportation revenues by approximately 11% despite some softness in automotive catalysis. In Specialty Industrial, market conditions resulted in flat to modest growth of around 1%. Adjusted EBITDA margin expansion reflects the impact of higher volumes relative to fixed costs, as well as a favorable shift towards higher-value defense programs. Furthermore, there is ongoing payoff from the site consolidation and lean operational efficiencies we embedded under our Luxfer Business System last year, which will continue to deliver cost savings and margin resilience. Overall, Luxfer's performance underscores the power of focused execution and targeted innovation. With that, let's turn to Slide 6 for our Gas Cylinders results. Luxfer Gas Cylinders is the benchmark for mission-critical pressure vessels anchored by SCBA market leadership and long-standing partnerships with blue-chip OEMs. Our lightweight rugged cylinders protect fire emergency and hazardous environment teams, while our high-performance, high-strength cylinders enable life support and operations in aerospace and space exploration applications. We also serve specialty industrial, medical, and alternative fuel markets with precision engineered solutions. Backed by proprietary processes and rigorous qualifications, this segment commands premium pricing and delivers resilient margins in high barrier markets. In the first quarter, Gas Cylinders revenue was $41.1 million, down 9% from $45.4 million in quarter 1, 2024, and adjusted EBITDA came in at $2.6 million, reflecting a 6.3% margin versus 9% last year. This performance was largely in line with our expectations. We saw softer demand in alternative fuel cylinders, with the heavy-duty truck market still subdued. Aerospace and especially space exploration demand is robust, although overall transportation sales declined about 23% year-over-year. However, despite the anticipated softness in alternative fuels, the strong aerospace volumes and the order for our first bulk gas transportation module will open new opportunities for future growth. Although down 7%, our Defense, First Response, and Healthcare business held up relatively well with steady orders for SCBA and an improving outlook. Specialty Industrial posted a notable 25% increase driven by electronic and calibration gas applications. Margin compression resulted from the lower volumes, although pricing actions helped offset some headwinds. Importantly, the efficiency initiatives we put in place last year are now starting to stabilize margins, and we expect these permanent measures to support stronger second half. In summary, while gas cylinders face headwinds in certain end markets, our core first responder, aerospace, and healthcare-related cylinders remained resilient, and our cost and efficiency focus will continue to drive improvements. Now please turn to Slide 7 for an update on our full year 2025 financial guidance. I'd like to reinforce two key themes from Andy's opening comments. Our tariff resilience and the strength of our backlog across defense, first response, and aerospace applications, combined with our diversified portfolio, give us some confidence despite the uncertain macroeconomic outlook. Accordingly, we are reaffirming our full year 2025 guidance, unchanged from what we communicated in February, with expectations for flat revenue growth. We continue to anticipate adjusted diluted earnings per share in the range of $0.95 to $1.05, adjusted EBITDA between $48 million and $52 million, and free cash flow generation of $20 million to $25 million for the full year. This outlook reflects our confidence in the aggregate underlying demand from our end markets, combined with disciplined cost management, prudent price actions, and tight working capital controls. That said, foreign exchange does remain a key sensitivity, and indeed, we have seen significant volatility in the last few weeks. For our business, a $0.05 move in the dollar versus sterling can shift our full year earnings by around $1 million, although we continue to hedge selectively to mitigate some of that risk. On capital deployment, we will maintain our routine share repurchase program, with board authorization for up to $10 million of additional opportunistic buybacks. We're also evaluating further simplification and cost reduction initiatives to drive improved efficiencies across our operations. We remain confident that our fortress balance sheet and diversified end market exposure will enable us to navigate any remaining headwinds and deliver on our projections. Now I'd like to pass the call back to Andy.

Thank you, Steve. Please turn to Slide 8. Our Luxfer Business System gives us a structured way to innovate, drive efficiency, and stay agile, always focused on meeting customer needs and delivering profitable growth. A prime example is our Unitized Group Rations, UGR-E platform, where lean principles and direct user feedback produced a highly portable, low touch module crafted with environmentally friendly materials, perfectly suited for today's dynamic field environments. Military teams operating in hostile or rapidly changing settings have found this additional option vital, not only in deployments without dedicated kitchen staff but also during training exercises where permanent mess facilities are not available. By minimizing manpower requirements and setup complexity, UGR-E enables sustained operations anywhere. Sales of UGR-E reached a record $4.6 million in 2024, and our backlog for this year indicates demand will more than double that level in 2025. I'm especially proud to share that the U.S. military is tendering UGR-E modules for its war stock under a vendor-managed inventory program. This underscores our confidence in UGR-E as a strategic complement to traditional single-person meals ready-to-eat and highlights our ability to deliver and replenish these platforms seamlessly. These advancements, portability, low-touch operation, and military-validated inventory support exemplify how the Luxfer Business System embeds continuous customer-driven innovation into everything we do. Now please turn to Slide 9 to review the highlights and achievements of the first quarter. We delivered solid operational execution in Q1 posting adjusted earnings per share of $0.23 and generating $5.1 million of cash from operations, turning a typically working capital-intensive first quarter into a net inflow. The sale of our Graphic Arts business remains on track to close in the first half of 2025, freeing up capital and talent to fuel higher-margin growth opportunities. Margin and cash discipline remain at the core of our model; permanent process improvements, disciplined working capital management, and careful pricing decisions have not only widened margins but also maintained low levels of net debt. Our targeted innovation continues to drive results. The lean-driven redesign of UGR-E and standout MRE performance showcase how the Luxfer Business System accelerates customer-focused solutions in one of our important defense-oriented product lines. Finally, our proactive approach to tariff risk from leveraging critical material exclusions and USMCA coverage to long-term supply agreements, inventory buffers, and dynamic pricing positions us to weather tariff disruptions with minimal impact. The results we have shared this morning reflect our long-term focus: executing today while investing in tomorrow. Since our October 2023 strategic review, we've acted on key opportunities, divesting Graphic Arts on track for H1 2025 and driving cost, innovation, and margin gains in both Elektron and Gas Cylinders to sharpen our portfolio and boost profitability. We also remain attentive in assessing market conditions to maximize future shareholder value. Thank you to our global associates for their dedication, and thanks to all of you for your continued interest in Luxfer. I will now turn the call back to the operator for questions. Madison, please go ahead.

And we will take our first question from Steve Ferazani with Sidoti.

I appreciate all the detail on the call. Certainly, strong start to the year, outperformed our expectations. I don't know if it outperformed your internal expectations. But just trying to find out anything special in the quarter? Were there any pull forwards? And does this set you up because you didn't raise guidance; does this set you up for a better year?

Thanks, Steve, and good morning. Yes, we were pleased with the Q1 results. I think the thing we were most pleased about was the strength in the defense market. Q1 was particularly encouraging in that respect. The sales of the flameless ration heaters were good and should remain elevated, UGR-E range ramping up, that's helpful. Magnesium powders for flares, magnesium alloys for defense. Those are encouraging, especially flares. So overall, we're very positive on the defense sector for 2025. Of course, we're conscious of monitoring macroeconomic changes closely, thinking about future tariffs, exchange rates, and supply of rare earths. But we like where we sit at the end of quarter 1, and that's why we're reaffirming our guidance.

I was particularly surprised by the strength you saw in specialty industrials in the gas cylinder side. Is there anything driving that?

Yes. I believe there are some long-term trends in specialty industrial gas cylinders. Our product is focused on profitable niches where customers seek special high-purity gases that need to be stored in cylinders with inert surfaces. These are not standard industrial gas products; they are specialty items. They are used in applications like semiconductors, other electronics, and calibration gases. Several reports indicate that the demand for these gases will increase in the long term, which is encouraging.

Great. If I can ask about uses of cash. Obviously, your balance sheet now is in such a virtually pristine shape. It sounded, Steve, like you had mentioned that you would increase the buyback by $10 million for opportunistic purchases. Can you talk about capital allocation in this environment where your CapEx is so low? How do you think about buybacks? And also, if you can touch on M&A potential?

Yes, first of all, I'll address the buyback. We are continuing our standard buyback program, which serves as an antidilution measure for management incentives. The Board has authorized up to $10 million for opportunistic buybacks, although we haven't started that yet, we are considering it, especially if the stock price holds steady. Regarding capital expenditures, we spent about $1 million in the first quarter, but we anticipate spending more this year than we have in previous years. Our guidance remains at $12 million to $15 million, consistent with what we stated at the end of the fourth quarter. We are expecting an increase in CapEx this year due to some promising growth opportunities, along with our regular maintenance expenses. As for mergers and acquisitions, we are always open to possibilities and we regularly review a pipeline of opportunities with our business units, though nothing is imminent at the moment.

Great. Can I ask about your defense business? I know that some of the higher margin areas, like MREs, can be inconsistent, but you've had almost three consecutive quarters of strong performance there. Is this due to the UGR-E launch, or is there something else contributing to it? How sustainable is this trend?

It's two things, Steve. It's the UGR-E which continues to ramp up, as you've highlighted. But it's also some elevated levels of replenishments that's going on most of this year, probably at least through quarter 3 in military stocking. So there's some way to go on that, as well as stronger sales in the flares market. So yes, it does look positive at the moment.

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. As we conclude, I want to remind you what makes Luxfer a compelling investment. In Q1, we not only delivered strong first quarter cash flow but we also expanded margins and generated top-line growth in our core defense and aerospace end markets. Our lean-driven Luxfer Business System has permanently embedded cost and process improvements, while targeted innovations such as UGR-E and the recently launched bulk gas transportation module demonstrate our ability to respond to customer needs. We have a solid balance sheet, low leverage, and recurring demand in high barrier businesses. And with board authorized share repurchases, disciplined capital allocation, and a robust backlog underpinning our outlook, we are well positioned to deliver sustainable long-term value. Thank you to our global team for their dedication, and thank you all for your support. We look forward to updating you next quarter.

Thank you. This concludes Luxfer's Q1 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.