Luxfer Holdings PLC

Good morning. My name is Emma, and I will be your conference operator today. Welcome to Luxfer 2021 Third Quarter Earnings Call Conference. All lines have been placed on mute. After the speaker's remarks, there will be a question-answer session. Now, I will turn the call over to Heather from Luxfer. Heather, please go ahead.

Thank you, Emma, and welcome to Luxfer's Third Quarter 2021 Earnings Call. We're happy to have you all with us today. I'm Heather Harding, Luxfer's Chief Financial Officer, and with me today is Alok Maskara. Luxor's Chief Executive Officer. On today's call, we will provide details of our third quarter 2021 performance as outlined in the press release issued yesterday. Today's webcast is accompanied by a presentation that can be accessed at Luxor.com. Please note that any references to non-GAAP financials are reconciled in the appendix of this presentation. Now, 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. So please refer to the Safe Harbor Statement on slide two of today's presentation for further details. Now let me turn the call over to Alok.

Thanks, Heather, and welcome, everyone. Before I dive into the results, I want to express my gratitude to the LuxFor team, who continue to work diligently during the pandemic to secure the material and talent needed to increase manufacturing output during the ongoing global supply chain disruptions. I also want to thank our customers for their patience and support through these difficult times as the Luxfer team races to overcome multiple unprecedented issues impacting our supply chain. Now, please turn to slide three for highlights from our third quarter results. I want to highlight four key messages on this page. We delivered 17.4% year-over-year sales growth in the third quarter, as strong demand across our end markets was aided by solid contributions from our SCI acquisition, which added 10.2% to sales. Excluding the impact of FX and the acquisition, we achieved 4.5% organic volume growth, even though we were unable to fully convert strong demand into sales. due to global supply chain constraints. Second, we generated good free cash and maintained a strong balance sheet this quarter with a net debt to EBITDA ratio of 0.6 times. We returned over $5.3 million to shareholders this quarter through dividends and share buyback. We will remain thoughtful and disciplined in our approach to acquisitions while continuing to invest in automation and growth projects to increase shareholder returns. Third, we continue to make progress in reshaping our portfolio with the completion of the SuperFarm UK divestiture. This is an important strategic milestone as we align our portfolio towards LuxForce differentiated technology and attractive end markets. Finally, Q3 EBITDA was flat and our margins in Q3 were lower as we faced rapid inflation and incurred extra costs to combat the supply chain disruptions. We remain confident about offsetting the inflationary pressures in the medium term. Please turn to slide four for a summary of the current manufacturing and supply chain challenges. Just like many other manufacturing companies, we are facing supply chain challenges that are constraining our ability to fully satisfy the high level of demand from our customers. On the raw material supply side, three key suppliers declared force majeure during the past several months, while many others have delayed the delivery of critical raw materials. This has forced us to temporarily stop accepting new customers and orders for certain products, while alternate suppliers ramp up production. The manufacturing labor shortage continues to impact many of our locations, causing us to reduce shifts and adjust our production rates to match the labor availability. In response, we have aggressively increased starting wages and doubled our recruiting resources. Our team is further ramping up recruiting and retention efforts to increase manufacturing output to fully satisfy the elevated demand levels from our customers. Freight availability and cost of freight remains challenging, especially for international goods transportation. We have implemented freight surcharges and are aggressively working with our transportation providers to reduce freight costs and delays. The price of critical raw materials such as magnesium, carbon fiber, aluminum, and zirconium have increased rapidly, and in many cases, we are facing record high prices. We have good relationships and contracts with our suppliers and are jointly working with them to secure appropriate supply and understand future price levels. In many cases, the price hike is caused by recent and temporary changes in output from China. We remain confident of maintaining our medium to long-term margins by offsetting inflation. I would like to remind everyone that our supply chain is more localized than our peers, and therefore, we are better positioned to gain share during this period of unprecedented global supply chain disruptions. Please turn to slide five for an update on our alternative fuel growth initiative. Alternative fuel is a strategically important product line for us, and the focus application of storing and transporting compressed natural gas and hydrogen is a fast-growing product line for Luxfor gas cylinders. The three different type of AF solutions that we offer our customers are, one, high-pressure composite cylinders for heavy-duty vehicles, two, alternative fuel bus systems, and three, bulk gas transportation cylinders and modules. Sales of all three of our solutions are growing rapidly, and today I wanted to highlight our leading solution for hydrogen bulk gas transportation. As shown on the schematic on the left of page five, hydrogen bulk gas transportation is required to efficiently move hydrogen from the point of production, such as a solar or wind farm, to the point of use, such as a refueling station for hydrogen electric public buses. Our proprietary solution fills a critical gap in the evolving hydrogen supply chain and supports the adoption of clean energy. End-user bulk gas transportation solutions using Luxor hydrogen technology provides the customer operator with significant advantages, such as lower filling time, higher filling temperature, and higher hydrogen capacity per trailer. We are investing in innovation to enhance our value proposition and in localized capacity expansion to better serve our customers. We are excited to partner with other industry leaders to commercialize this proven practical solutions for hydrogen transportation and hence accelerate the transition towards a green, zero-carbon economy. In summary, we remain confident in capturing the growth opportunities ahead for our alternative fuel product lines. Now, let me turn the call over to Heather for details of our third quarter financials.

Thanks, Alok. I'll start the current quarter review on slide six with a summary of our performance by end-user market. Now, as a reminder, our sales can be classified into three key end-user markets, Defense First Response and Healthcare, Transportation, which is a combination of Alternative Fuel, Aerospace, and Automotive, and General Industrial. In the defense first response and healthcare end markets, sales increased by 6.2% for the third quarter versus the same quarter last year. We saw increased strong demand for SCBA and magnesium powders products, which were partially tempered with lower replenishments of military and disaster release products. Sales and transportation grew 42.7% in the third quarter. The recent SCI acquisition positively impacted sales performance of this market in addition We generated solid growth in our auto catalyst products driven by industry recovery and wider adoption of gasoline particulate filtration. Sales in the general industrial end user market increased 9% in the quarter driven by the strong market recovery with most product categories within this end market growing relative to the prior year. Now please turn to slide seven for a summary of our third quarter P&L results. Third quarter sales of $91.2 million increased 17.4% from the prior year, with favorable FX contribution of 2.7%. The FDI acquisition added 7.9 million in third quarter sales, or 10.2% of growth. Organic growth of 4.5% was largely driven by our transportation and industrial products. Consolidated adjusted EBITDA of $13.8 million for the quarter increased slightly from the prior year, despite the impacts of SCI acquisition and rising inflation. In the short term, we were unable to fully offset strong inflationary pressures. However, we remain confident in our ability to recover margins over the long term. Margins were also negatively impacted by mix between electron and gas cylinder segment sales. The recently acquired SCI business delivered stronger than anticipated revenues in the quarter, but as expected, still remains unprofitable. We anticipate capturing the expected cost synergies in 2022 and beyond, making the business accretive to Luxfer. Overall, we achieved solid performance in our base business with flat margins and a tough cost macro environment as we prioritize serving our customers. Now let's look at the product segment results on slide eight. Electron sales of $45.6 million were essentially flat from the prior year, with price and FX impacts offset by a net volume decline as we were unable to fully satisfy customer demand in some product lines due to the supply chain constraints we mentioned earlier. Volumes recovered for industrial magnesium and auto catalyst products offset by lower military sales. EBITDA increased over 27% to 8.4 million on flat sales due to mixed and productivity improvements. Gas cylinder segment sales grew 41.2% to $45.6 million. including $7.9 million in sales from the SCI acquisition. In addition, we saw strong demand for industrial specialty cylinders and SCBA products. EBITDA of 5.4 million declined from the prior year, primarily due to SCI. Now, let's review our key balance sheet and cash flow metrics on slide nine. We maintained our strong balance sheet in the quarter. Our net debt position improved to $34.5 million leading to a net debt to EBITDA ratio of 0.6 times. Third quarter operating working capital finished at $78.8 million or 21.6% of sales, which is an improvement over the prior year's 23.4%. We continue to target an operating working capital range of 20 to 23% of sales. After a strong cashflow generation in the first half of the year, we continued our focus generating free cashflow of $7.7 million in the third quarter, bringing our year-to-date free cash flow total to $28.5 million. And also on a trailing 12-month basis, we delivered 19% ROIC based on adjusted earnings. We're also finalizing the renewal of our $100 million revolving credit facility with a new five-year arrangement with better terms and conditions that more accurately reflect the strength of our balance sheets. The new arrangement will include a $50 million private placement shelf agreement along with a $50 million accordion. These facilities will provide ample liquidity to fund our growth opportunities as we also continue to generate long-term positive free cash flow. Now let's review our capital allocation priorities on slide 10. Our capital allocation priorities remain unchanged. We expect to create value through internal execution while pursuing strategic bolt-on acquisition to supplement our organic growth. In the third quarter, we maintained our quarterly dividend of $3.4 million and repurchased shares totaling $1.9 million, returning a total of $5.3 million to shareholders. Now, I'd like to review our updated 2021 guidance on slide 11. Given the year-to-date performance, we have narrowed our full-year guidance range to $1.20 to $1.25, compared to our previously communicated range of $1.15 to $1.30. While our order book remains healthy, we remain cautious given the ongoing material supply challenges, rate disruptions, and labor shortages previously discussed. We'll continue our execution on cash management initiatives, targeting 100% free cash flow conversion for the full year, excluding restructuring. We remain confident in our ability to successfully navigate through the recovery this year and be well-positioned to capture growth. Now I'll turn the call back over to Alok for a wrap-up.

Thanks, Heather. Before I wrap up, I wanted to provide a summary of the opportunity for Luxfer in the coming year on slide 12. As we enter the fourth quarter of 2021 and look forward onto 2022, we do it with a growing sense of uncertainty and concern regarding rising cost pressures and increasing supply chain constraints. However, we are stronger and more resilient today than at any other time in our recent history. Our technology and operations are aligned with secular, sustainable growth drivers, and we are investing in innovation to continue our growth in new products. We have a customer first focus to guide us through these challenging times. Going into 2022, We are encouraged by the robust demand levels and macro environment, including the level of energy prices, which will support our growth. In addition, 2022 differentiated growth will also be driven by ongoing investment in alternative fuel and from our new products, such as UGRE, which is expected to accelerate growth in the defense end user segment. And our capital deployment strategy is working. as we have built a strong and flexible balance sheet enabling us to return cash to our shareholders while investing in organic and inorganic growth opportunities. We don't have any near-term debt maturities and will continue to pursue bolt-on synergistic acquisitions that will enhance shareholder value. While the beginning of 2022 will likely be challenging, I am confident that we are heading in the right direction. Now, please turn to slide 13 for a recap of LuxFor value proposition. We have built a strong foundation for long-term success. We have transformed the business by lowering our cost structure and optimizing our operational footprint, bringing quantifiable savings to the bottom line. We have reshaped our portfolio, focusing on markets where our proprietary technologies add the greatest value. We are creating a winning culture, establishing processes that guide our daily activities, enabling us to excel in every part of our organization. And we have the financial flexibility to reinvest in the business and pursue bolt-on acquisition opportunities. In short, our best days are ahead of us. Once again, I want to thank all our employees around the world for safely operating our facilities during the pandemic and continuing to put our customers first, especially during the current global supply chain disruptions. Thank you for listening. We will now take questions.

At this time, if you would like to ask a question, please press star 1 on your touch-tone phone. You may remove yourself from the queue at any time by pressing the pound key. Once again, that is star and one to take a question. We'll take our first question from Chris Moore with CJS Securities.

Hey, good morning. Thanks for taking a couple questions. Good morning, Chris. Good morning. Good morning, Chris. Good morning. You had mentioned that you halted accepting new orders and new customers for certain products while your ramp alternate supplier is there. Could you be maybe a little bit more specific on the product and really kind of what that competitive landscape looks like for those products?

Sure. Let me start with the competitive landscape. I mean, these shortages and constraints are being felt by everybody in the competitive landscape. So we are not the only one facing these situations. These products broadly are going to be into the core raw materials that I talked about. So these are zirconium-based materials that we had highlighted in Q2, Chris, about force majeure in one of our mines. Since then, a magnesium supplier, one of the magnesium suppliers has also declared force majeure. And there's been quite a few articles about the magnesium shortage, starting with a province in China. And then carbon fiber has been in very short supply. So in all cases, we have good relationship. We are managing to get products to satisfy our current customers. But at the same time, we are unable to take new customers and specific new orders, just so that we don't disappoint anybody. So we'll have had to more allocation-based systems and prioritize serving our current customers.

Got it. I appreciate that. The hydrogen bulk gas transportation opportunity, in the slides, you talked about the market potentially reaching 200 million plus by 2025. There's only a few players in this space. You know, I know you've teamed up with Octopus Hydrogen. What's a reasonable expectation in terms of market share in 2025? I mean, could a third of that market be yours? Could it be more than that?

You know, I mean, it's a very fast evolving market, but I think the numbers that you're looking at is probably in the right range. I mean, it's a Markets new, we have been in this for a long period of time, especially given our CNG background. But I would say for our perspective, maybe 20% to 40% market share is a good assumption. There are other companies also focusing on it. What we are very excited about is our unique value proposition, where our cylinders can be filled faster, they can take higher temperature. and we can provide overall a better value proposition to our customers. But I would say 20% to 40% market share is in the right range, Chris, but there's a lot to be learned here and a lot to be proven.

Got it. I appreciate it. Last one for me is just maybe a little bit more on the outlook for Solumag. Given the steep increase in oil and natural gas prices, I'm not sure how much of a lag there is between demand and prices improving, just any kind of updated thoughts there?

Sure. I mean, clearly oil over $70 and oil over $80 is good for many of our product lines, including the zirconium line and including Solumax. And it is doing better than kind of what we would have expected from last year under the perspective. It's still going to be in the, we used to say, $6 million to $10 million range. This year it might be $6 million to $12 million range for now. given that the oil price spike is pretty recent and the activity is picking up. But, yeah, we're definitely feeling good about it, and it's going to be a question of, like, you know, how long are these prices sustained? But it's good for Solimac, and we are definitely looking at high end of previously communicated range, maybe a little higher than that as well.

Got it. I'll jump back in line. Thank you.

Thanks, Chris.

Our next question comes from Craig Irwin with Roth Capital Partners.

Good morning. And, Alok, I should say congratulations on a strong quarter in a difficult macro environment. Thanks, Craig. The biggest question you addressed thoroughly, right, the supply chain issues, particularly around magnesium, and it looks like you're well positioned to continue the success of this quarter. So when we talk to investors, the second question for this environment, the big question as they look for new ideas for their portfolios, is companies that have a strong ability to pass through costs increases with price. So I know that you've been really focused on appropriately positioning the portfolio and fairly pricing things for your market. And you have consistently had a little bit of positive price over the last couple of years. Can you talk about conversations maybe that you're having with customers about the necessity to pass through increased costs? What is your comfort level that Luxor should be able to sort of maintain a consistent level of profitability through pricing actions? Are there any concerns or maybe any points that give you confidence that Luxfer will execute well on the pass-through of increased costs in this environment.

Yeah, Craig, I mean, clearly a topic that's got a lot of attention from us, our customers, our investors. Historically, we have always talked about that, you know, cost versus inflation, we are able to offset within a 90-day timeframe. This quarter, you'll notice we were unable to do that. some of the cost increases in freight and magnesium were a factor of 2x or 3x in a short period of time. I think going back to our original philosophy of offsetting cost pressures or inflationary pressure within 90 days still holds true. I mean, in some cases it might extend to 120 days, but we are very confident that we'll be able to pass through prices. And that confidence is driven by our contracts in quite a few cases, which have riders on raw materials, whether that's carbon fiber or aluminum or magnesium, and also based on our customer base, which is facing inflation from all directions, not just from us. So we are very confident. This quarter we couldn't do it, but that's just a delay based on how steep some of the increases was, especially in places like magnesium.

Understood, understood. My next question is about SCI. So, you know, $7.9 million is a fantastic contribution. Obviously, it's tracking, you know, very well versus the original expectations and continues to gain a little bit of strength. Can you talk about what's really working in there? I mean, is this the end market? Is this the product portfolio? Is it maybe product availability given that you know, others are having issues with production. You know, any color you can offer would be great.

Sure. I think you're right. I mean, it's better than expected. Heather mentioned that in her comments. The support from the customer has been overwhelming. What we brought in here is our expertise. We brought in better availability with our lean discipline and lean focus. And clearly, you know, customers are very excited about it. In terms of Product set, yes, it's got some good product sets, a good set of established base. You know, and we have focused putting our customers first here, and some of the integration work we have done, like putting them on our SAP system, has also helped. There is clearly some market tapings as well, and the hydrogen business, as you know, has been growing very rapidly, along with even the natural gas. So I think it's all of those factors you mentioned, We are excited about giving more options to our customers with the spread out between the different production capabilities and different technology.

Thank you. Then the last question, if I may. On previous calls, you've talked a little bit about your filtration product for the automotive catalysis space. Can you update us on the uptake with customers You know, and where we sit now, you know, the adoption, you know, are we still in sort of very early innings there? Or are the customers that will use your product, your new technology, have selected it and are implementing it? And, you know, it's the growth with those customers that drives the revenue for the next few quarters.

Yeah, Craig, the gasoline particulate filtration product that we launched last year is doing quite well. We are still in the early innings, as you called it. Some of the reason we did not call it out in this earnings call is given what's happening in the automotive market, a lot of our customers are facing chip shortages and hence their overall order volume is lower than what we would have anticipated. But from penetration perspective and adoption perspective, we are very pleased and we are in the early stages. We are confident that the content per vehicle for Luxfer will go up and more than offset any decline in the internal combustion engine for the next three to five years.

Excellent. Well, congratulations again on the quarter. I'll hop back in the queue. Thanks. Thanks, Craig.

We'll go next to Sirkish Shibuchin with B-Ready Securities.

Hi, good morning, and thank you for taking my question here. Alok, you mentioned... The press release mentioned adjusting inventory to maintain service levels. Are you kind of temporarily, you know, increasing working capital here to essentially secure supplies wherever you can? Is that kind of a read-through there?

Heather, do you want to take that?

Yeah, good morning, Sarkis. Certainly on a lot of these key raw material inputs that Alok mentioned, yes, in some cases we have increased our working capital. Certainly we're still happy with the performance level, and it's well within the range that we've set for ourselves of 20% to 23%. But we have prioritized our customers first in this area, and so there have been instances where we are implementing some increases in inventory levels of key raw materials to make sure that we have availability and can serve customers in these critical applications.

Yeah, that makes sense. I guess my broader question related to this would be going forward, would you think that some of these key materials deserve a larger capital allocation on the balance sheet in the event that some of these supply chain hiccups continue in future periods? What are your thoughts around that?

I'll take that one, Sarkis. Sarkis, I would say no, there's not going to be a structural change. The majority of our raw material sources tend to be local. We buy aluminum from Canada, magnesium in the U.S., for U.S. So in most cases, no. I do think there will be a temporary spike in inventory just because of the extended lead time and driven by just freight delays and availability. But in the long term, to Heather's earlier comment, we stick to the 20% to 23%. of operating working capital as a percentage of sales. And we do things returning back to normal by second half of next year.

No, that's very helpful. And I noticed you speak to pricing actions offsetting the inflation in the medium to long term. I think what would also be helpful is if you can maybe put a timeline to that. I think you mentioned typically it's a 90-day cycle. It might extend to 120 days. I guess in this current environment, When do you think pricing starts to catch up to the inflation that you're experiencing to at least be able to defend what you're typically able to earn?

Sure. So I think right now, we have already done quite a few pricing changes. So for example, on freight, we have to implement surcharges right at the end of Q2. Even on magnesium and aluminum, based on significant changes in LME, we have done price changes. We hope to catch up by end of Q4 to pricing versus inflation. In some cases, the contracts allow us to do it early, some cases to do it late. If materials don't continue spiking, which is what our expectation is, seems like we've reached more stable environment recently, and in some cases it's going down, I think by end of Q4 we should be caught up, Sarvesh.

Very helpful. And I think the final one that I had, you call out accelerating investments in automation and digitization. I think this is a question that I've kind of tried to ask in a few different calls. Obviously, the labor shortage might be accelerating this area. Any more color or thoughts around how quickly you anticipate on improving automation and digitization in the manufacturing floor? what the spend levels would be like, any kind of incrementals there would be very helpful.

I think the two incrementals we would look at, from a CapEx perspective, it will still be the same range we have talked about, Sharkey, because those were baked in. This year is running a little bit low, and that's because many of our, even automation orders are being delayed, given the chip shortage and the supply chain issues. But I think we stick with the $10 to $12 million in CapEx. On the overall R&D span, we are right about 1%. I mean, our goal is to take that higher over the next three to five years, and we will peak out at a number of two or five years from now. So you can see a small incremental increase in that. So these are not big numbers. A lot of this is going to be about redeploying our resources away from projects that were not working and businesses that are no longer with LuxFirms. more towards automation and growth in businesses that are growing and delivering good value. So the capex would remain about 10 to 12 higher than this year because this year is just going to be artificially lower as we couldn't get many of the equipment that we ordered.

Good. That's very helpful. That's all from me. Thank you. Thanks, Arkeesh.

We'll go next to Phil Gibbs with KeyBank Capital.

Morning, Phil.

Hey, good morning.

Morning, Phil.

So, look, on the magnesium side, you certainly source more locally versus China, but there are challenges in both regions as well. I mean, you mentioned the force majeure and spot pricing for magnesium has spiked in recent weeks. Do you have contracts with your magnesium suppliers that subdue or temper the spot price increases? Do you have fixed price contracts, things of that nature that will cap potential momentum in the raw material?

We do, Phil. So I think if you think about magnesium, our biggest focus is availability right now and making sure that we can serve customers' demand. As we have previously discussed, disclosed, for large defense contracts, we typically do back-to-back pricing. So in terms of take the risk away from price inflation that we are facing, like right now. So for large defense contracts, that's what we'll end up doing. For more commercial magnesium, our contracts are not as long, but they're still typically at least a year-long type contract. So large defense will be three-year type contracts, and commercial would be like one-year contracts. Here are the prices. We went through a peak. It's come down since then. We are optimistic that that trend will continue. We are actively working with our suppliers, both in US and in China, to make sure there's appropriate material. We are always long on these materials. So we have material in inventory. We have material on order. And the full impact of this will probably not be known until early Q1. when I think things will be more stable. But this has happened before. And as a business, we are used to managing through disruptions like this. This one is probably a little bit more severe than what we had faced in the past.

So, you know, assuming, let's just say, assume supply stays reasonably constrained for a few months, three months, maybe four or five months, however long it lasts. And you said you're tempering your order book with some of your customers, particularly in the magnesium space. So is there, is there a cap, you know, on, on how much volume you could, you could ship in, in that, you know, business, uh, until these, these things, you know, alleviate, you know, is it 80% of normal, 90% of normal? How do we think about that?

Yeah. Uh, Hard to give a number fail because I think right now we have enough magnesium to satisfy customers' need at least until the end of the year, clearly working through. And we usually buy only 90, 120 days in advance and clearly working through options for January, February. The orders and new customers that we are not taking right now is – you know, probably in the 10%, 20% range. So, yeah, maybe the 75%, 80% number is the right number. It could change when Q1 comes around. I think right now there's still a lot of uncertainty, which is probably more unnerving. But, you know, we are serving our current customers and working pretty aggressively with all suppliers to ensure an appropriate supply going into 2022 as well. In the broader magnesium market, Phil, We are a small user, and we are a very high-end user. So compared to some of the other folks who use magnesium for aluminum and others, we are confident we'll be able to secure supply faster than they would.

Thanks, Alok. And on the zirconium side, it sounds like those supply chain issues are on the mend. I mean, I think the impacts were felt in the third quarter from what you said, maybe a little bit in the fourth, but supply there sounds like it's improving?

Definitely improving. The core supplier, RTZ, has restarted the mine. We have qualified alternate suppliers as well, and we have reformulated our processes to use some intermediary. We're not back to 100% fill, but the concern is much more muted right now compared to what it was at the end of Q2.

Okay. And then my last one is just on cash restructuring costs. What's the outlook for 4Q for cash restructuring and what should we anticipate for 2022? Because I know you said you had pushed some out. Thanks so much.

Yeah, I'll take that one. So certainly, you know, as we look through our cash restructuring needs, Based on the situation, as you may recall, Phil, it's primarily French-related. And based on the status and the slow timeline and pace at which that is resolving, we basically pushed most cash restructuring costs that we had planned for that into 22. I believe our last guidance, we had said it could be, you know, I think it was $16 to $20 million. And that's primarily been pushed now into 2022. We'll have to look at that phasing as we get into, you know, the next cycle and see where we are with that case.

So 16 to 20 million in total for 2022? Is that what you're saying, Heather?

Yeah, that was the amount that was left, and we have now pushed that out of this year. It would likely be next year, but again, we'll have to look at the specific quarterly phasing of that. because I don't have better clarity on when that might get settled yet. I just know it's not likely to occur this year.

Okay. Thanks so much.

Thanks, Bill.

An in-core recording of this conference call will be available in about two hours. Telephone numbers to access the recording will be available on the Luxor website at www.luxfer.com. Thank you for joining us today. The next regularly scheduled call will be in February of 2022 when the company discusses its 2021 full-year financial results. This ends the Luxor conference call.