Completes Acquisition of OpSec Security, a Global Leader in Brand Protection and Authentication Solutions
Increases Sales Growth Guidance to 5% to 8% for Full Year 2024
Recent Highlights
- Crane NXT completed the acquisition of OpSec Security (OpSec) on
May 3, 2024 for$270 million in cash. - First quarter core sales declined 4.2% year-over-year, in line with the Company's expectations resulting in GAAP earnings per diluted share (EPS) of
$0.66 , and Adjusted EPS of$0.85 . - The Company is increasing its full year 2024 sales guidance to 5% to 8% with the completion of the OpSec acquisition. Please see the "Full Year 2024 Guidance" section in this press release for more details.
Summary of First Quarter 2024 Results
Three Months Ended | Change | |||||||||||||||
(dollars in millions) | 2024 | 2023 | $ | % | ||||||||||||
Net sales | $ | 313.6 | $ | 329.1 | $ | (15.5 | ) | (4.7 | )% | |||||||
Core sales | $ | (13.9 | ) | (4.2 | )% | |||||||||||
Foreign exchange | $ | (1.6 | ) | (0.5 | )% | |||||||||||
Operating profit | $ | 55.4 | $ | 65.9 | $ | (10.5 | ) | (15.9 | )% | |||||||
Adjusted operating profit* | $ | 71.1 | $ | 76.8 | $ | (5.7 | ) | (7.4 | )% | |||||||
Operating profit margin | 17.7 | % | 20.0 | % | (230bps | ) | ||||||||||
Adjusted operating profit margin* | 22.7 | % | 23.3 | % | (60bps | ) | ||||||||||
Totals may not sum due to rounding *Please see the Non-GAAP Financial Measures tables in this release | ||||||||||||||||
First Quarter 2024 Results
First quarter 2024 sales were
First quarter 2024 operating profit was
First Quarter 2024 Segment Results
All comparisons detailed in this section refer to operating results for the first quarter 2024 versus the first quarter 2023.
Crane Payment Innovations
Three Months Ended | Change | |||||||||||||||
(dollars in millions) | 2024 | 2023 | $ | % | ||||||||||||
Net sales | $ | 209.0 | $ | 223.8 | $ | (14.8 | ) | (6.6 | )% | |||||||
Core sales | $ | (12.6 | ) | (5.6 | )% | |||||||||||
Foreign exchange | $ | (2.2 | ) | (1.0 | )% | |||||||||||
Operating profit | $ | 52.7 | $ | 61.8 | $ | (9.1 | ) | (14.7 | )% | |||||||
Adjusted operating profit* | $ | 60.7 | $ | 67.3 | $ | (6.6 | ) | (9.8 | )% | |||||||
Operating profit margin | 25.2 | % | 27.6 | % | (240bps | ) | ||||||||||
Adjusted operating profit margin* | 29.0 | % | 30.1 | % | (110bps | ) | ||||||||||
Totals may not sum due to rounding *Please see the Non-GAAP Financial Measures tables in this release | ||||||||||||||||
Sales of
Crane Currency
Three Months Ended | Change | |||||||||||||||
(dollars in millions) | 2024 | 2023 | $ | % | ||||||||||||
Net sales | $ | 104.6 | $ | 105.3 | $ | (0.7 | ) | (0.7 | )% | |||||||
Core sales | $ | (1.4 | ) | (1.3 | )% | |||||||||||
Foreign exchange | $ | 0.6 | 0.6 | % | ||||||||||||
Operating profit | $ | 20.2 | $ | 17.6 | $ | 2.6 | 14.8 | % | ||||||||
Adjusted operating profit* | $ | 23.8 | $ | 21.2 | $ | 2.6 | 12.3 | % | ||||||||
Operating profit margin | 19.4 | % | 16.7 | % | 270bps | |||||||||||
Adjusted operating profit margin* | 22.8 | % | 20.1 | % | 270bps | |||||||||||
Totals may not sum due to rounding | ||||||||||||||||
*Please see the Non-GAAP Financial Measures tables in this release | ||||||||||||||||
Sales of
Cash Flow and Other Financial Metrics
For the first quarter of 2024, cash provided by operating activities was
The Company held cash and cash equivalents of
Full Year 2024 Guidance
The Company is updating its initial full year guidance provided on
Full Year 2024 Guidance Details | ||
(dollars in millions, except per share data) | Initial Guidance | Updated Guidance |
Crane NXT Sales Growth* | -1% to +3% | +5% to +8% |
Adjusted EPS | ||
Adjusted Segment Operating Margin | 27% to 29% | 26% to 28% |
Corporate Expense | ||
Non-Operating Expense, Net | ||
Adjusted Tax Rate | ~21% | ~21% |
Adjusted Free Cash Flow Conversion | ~100% | ~100% |
Diluted Shares | ~57.6 | ~57.6 |
*Includes FX impact of 0% to 1% | ||
Please see the Non-GAAP Financial Measures definitions in this release | ||
Declaring Second Quarter Dividend
Crane NXT announced its quarterly dividend of
Conference Call
Crane NXT scheduled a conference call to discuss the first quarter financial results on
About
Crane NXT is a premier industrial technology company that provides trusted technology solutions to secure, detect, and authenticate what matters most to its customers. Crane NXT is a pioneer in advanced micro-optics technology for securing physical products, and its sophisticated electronic equipment and associated software leverages proprietary core capabilities with detection and sensing technologies. Crane NXT has approximately 4,000 employees with global operations in
On
Historical financial measures in this release for Crane NXT are presented on a carve-out basis.
Forward-Looking Statements Disclaimer
This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements include all statements that are not historical statements of fact and those regarding the Company's intent, belief, or expectations.
Words such as “anticipate(s),” “expect(s),” “intend(s),” “believe(s),” “plan(s),” “may,” “will,” “would,” “could,” “should,” “seek(s),” and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements. These statements are based on management’s current expectations and beliefs and are subject to a number of risks and uncertainties that could lead to actual results differing materially from those projected, forecasted or expected. The Company assumes no (and disclaims any) obligation to revise or update these statements to reflect future events or circumstances. Although the Company believes that the assumptions underlying the forward-looking statements are reasonable, it can give no assurance that its expectations will be attained. The Company cautions investors not to place undue reliance on any such forward-looking statements.
Risks and uncertainties that could cause actual results to differ materially from the Company's expectations include, but are not limited to: changes in global economic conditions (including inflationary pressures) and geopolitical risks, including macroeconomic fluctuations; demand for its products, which is variable and subject to factors beyond its control; fluctuation in the prices of, or disruption in its ability to source, components and raw materials, and delays in the distribution of its products; information systems and technology networks failures, breaches in data security, theft of personally identifiable and other information, and non-compliance with its contractual or other legal obligations regarding such information; risks associated with conducting a substantial portion of its business outside the
Readers should carefully review Crane NXT, Co.’s financial statements and the notes thereto, as well as the section entitled “Risk Factors” in Item 1A of Crane NXT, Co.’s Annual Report on Form 10-K for the year ended
(Financial Tables Follow)
CRANE NXT, CO. AND SUBSIDIARIES Consolidated and Combined Condensed Statements of Operations Data (unaudited, in millions, except per share data) | |||||||
Three Months Ended | |||||||
2024 | 2023 | ||||||
Net sales: | |||||||
Crane Payment Innovations | $ | 209.0 | $ | 223.8 | |||
Crane Currency | 104.6 | 105.3 | |||||
Total net sales | $ | 313.6 | $ | 329.1 | |||
Operating profit (loss): | |||||||
Crane Payment Innovations | $ | 52.7 | $ | 61.8 | |||
Crane Currency | 20.2 | 17.6 | |||||
Corporate | (17.5 | ) | (13.5 | ) | |||
Total operating profit | $ | 55.4 | $ | 65.9 | |||
Interest income | 0.6 | 0.2 | |||||
Interest expense | (9.9 | ) | (10.4 | ) | |||
Related party interest expense | — | (2.5 | ) | ||||
Miscellaneous income, net | 0.6 | 1.4 | |||||
Income before income taxes | 46.7 | 54.6 | |||||
Provision for income taxes | 8.9 | 10.9 | |||||
Net income attributable to common shareholders | $ | 37.8 | $ | 43.7 | |||
Earnings per diluted share1 | $ | 0.66 | $ | 0.77 | |||
Average diluted shares outstanding1 | 57.7 | 56.7 | |||||
Average basic shares outstanding1 | 57.0 | 56.7 | |||||
Supplemental data: | |||||||
Cost of sales | $ | 161.2 | $ | 174.4 | |||
Selling, general and administrative | 94.3 | 88.8 | |||||
Restructuring charges, net | 2.7 | — | |||||
1 The shares presented for periods prior to the Separation are those of | |||||||
CRANE NXT, CO. AND SUBSIDIARIES Consolidated and Condensed Balance Sheets (unaudited, in millions) | |||||||
2024 | 2023 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 220.6 | $ | 227.2 | |||
Accounts receivable, net of allowance for credit losses of | 182.8 | 214.9 | |||||
Inventories, net | 166.1 | 157.1 | |||||
Other current assets | 59.6 | 45.2 | |||||
Total current assets | 629.1 | 644.4 | |||||
Property, plant and equipment, net | 254.7 | 261.2 | |||||
Long-term deferred tax assets | 2.7 | 2.7 | |||||
Intangible assets, net | 297.0 | 308.9 | |||||
830.1 | 841.2 | ||||||
Other assets | 85.1 | 71.0 | |||||
Total assets | $ | 2,098.7 | $ | 2,129.4 | |||
Liabilities and equity | |||||||
Current liabilities: | |||||||
Short-term borrowings | $ | 30.2 | $ | 4.6 | |||
Accounts payable | 84.1 | 106.5 | |||||
Accrued liabilities | 169.9 | 210.5 | |||||
12.7 | 12.8 | ||||||
Total current liabilities | 296.9 | 334.4 | |||||
Long-term debt | 639.6 | 640.3 | |||||
Accrued pension and postretirement benefits | 21.8 | 22.5 | |||||
Long-term deferred tax liability | 103.7 | 104.5 | |||||
Other liabilities | 72.6 | 63.7 | |||||
Total equity | 964.1 | 964.0 | |||||
Total liabilities and equity | $ | 2,098.7 | $ | 2,129.4 | |||
CRANE NXT, CO. AND SUBSIDIARIES Consolidated and Combined Condensed Statements of Cash Flows (unaudited, in millions) | |||||||
Three Months Ended | |||||||
2024 | 2023 | ||||||
Operating activities: | |||||||
Net income attributable to common shareholders | $ | 37.8 | $ | 43.7 | |||
Adjustments to reconcile net income to net cash flows provided by operating activities: | |||||||
Depreciation and amortization | 18.5 | 19.0 | |||||
Stock-based compensation expense | 2.3 | 2.3 | |||||
Deferred income taxes | 0.2 | 3.1 | |||||
Cash used for operating working capital | (50.8 | ) | (28.7 | ) | |||
Other | 1.5 | (3.9 | ) | ||||
Total provided by operating activities | $ | 9.5 | $ | 35.5 | |||
Investing activities: | |||||||
Capital expenditures | (12.5 | ) | (4.0 | ) | |||
Total used for investing activities | $ | (12.5 | ) | $ | (4.0 | ) | |
Financing activities: | |||||||
Dividends paid | (9.1 | ) | — | ||||
Proceeds from stock options exercised | 1.6 | — | |||||
Payment of tax withholding on equity awards vested | (6.2 | ) | — | ||||
Debt issuance costs | — | (4.0 | ) | ||||
Proceeds from revolving credit facility | 30.0 | — | |||||
Repayments of revolving credit facility | (5.0 | ) | — | ||||
Proceeds from term loan | — | 350.0 | |||||
Repayment of term loan | (0.7 | ) | — | ||||
Net transfers to Crane | — | (392.6 | ) | ||||
Total provided by (used for) financing activities | $ | 10.6 | $ | (46.6 | ) | ||
Effect of exchange rates on cash, cash equivalents and restricted cash | (7.9 | ) | 2.6 | ||||
Decrease in cash, cash equivalents and restricted cash | (0.3 | ) | (12.5 | ) | |||
Cash and cash equivalents at beginning of period | 227.2 | 230.7 | |||||
Cash, cash equivalents and restricted cash at end of period1 | $ | 226.9 | $ | 218.2 | |||
1 Includes both current and non-current balances of restricted cash. Current restricted cash, included within “Other current assets” in our Unaudited Consolidated and Combined Condensed Balance Sheets, was | |||||||
CRANE NXT, CO. AND SUBSIDIARIES Order Backlog (unaudited, in millions) | ||||||||||||||||||||
2024 | 2023 | 2023 | 2023 | 2023 | ||||||||||||||||
Crane Payment Innovations | $ | 188.6 | $ | 216.8 | $ | 231.6 | $ | 300.7 | $ | 348.7 | ||||||||||
Crane Currency | $ | 233.4 | $ | 243.0 | $ | 223.3 | $ | 184.4 | $ | 207.3 | ||||||||||
Total backlog | $ | 422.0 | $ | 459.8 | $ | 454.9 | $ | 485.1 | $ | 556.0 | ||||||||||
CRANE NXT, CO. AND SUBSIDIARIES Non-GAAP Financial Measures (unaudited, in millions, except per share data) | ||||||||||||||||
Three Months Ended | ||||||||||||||||
2024 | 2023 | |||||||||||||||
Adjusted Operating Profit and Adjusted Operating Profit Margin | $ | Per Share | $ | Per Share | ||||||||||||
Net sales (GAAP) | $ | 313.6 | $ | 329.1 | ||||||||||||
Operating profit (GAAP) | $ | 55.4 | $ | 65.9 | ||||||||||||
Operating profit margin (GAAP) | 17.7 | % | 20.0 | % | ||||||||||||
Special items impacting operating profit: | ||||||||||||||||
Intangible asset amortization | 8.9 | 9.1 | ||||||||||||||
Restructuring charges, net | 2.7 | — | ||||||||||||||
Transaction related expenses1 | 4.1 | 1.8 | ||||||||||||||
Adjusted operating profit (Non-GAAP) | $ | 71.1 | $ | 76.8 | ||||||||||||
Adjusted operating profit margin (Non-GAAP) | 22.7 | % | 23.3 | % | ||||||||||||
Adjusted Net Income and Adjusted Net Income per Share | ||||||||||||||||
Net income attributable to common shareholders (GAAP) | $ | 37.8 | $ | 0.66 | $ | 43.7 | $ | 0.77 | ||||||||
Intangible asset amortization | 8.9 | 0.15 | 9.1 | 0.16 | ||||||||||||
Restructuring charges, net | 2.7 | 0.05 | — | — | ||||||||||||
Transaction related expenses1 | 4.1 | 0.07 | 1.8 | 0.03 | ||||||||||||
Interest adjustment2 | — | — | 2.5 | 0.04 | ||||||||||||
Tax effect of the Non-GAAP adjustments | (4.3 | ) | (0.07 | ) | (1.7 | ) | (0.03 | ) | ||||||||
Adjusted net income (Non-GAAP) | $ | 49.2 | $ | 0.85 | $ | 55.4 | $ | 0.98 | ||||||||
Adjusted EBITDA and Adjusted EBITDA margin | ||||||||||||||||
Net income attributable to common shareholders (GAAP) | $ | 37.8 | $ | 43.7 | ||||||||||||
Net income margin (GAAP) | 12.1 | % | 13.3 | % | ||||||||||||
Adjustments to net income attributable to common shareholders: | ||||||||||||||||
Income tax expense | 8.9 | 10.9 | ||||||||||||||
Interest expense, net | 9.3 | 12.7 | ||||||||||||||
Depreciation | 9.0 | 9.8 | ||||||||||||||
Intangible asset amortization | 8.9 | 9.1 | ||||||||||||||
Restructuring charges, net | 2.7 | — | ||||||||||||||
Transaction related expenses1 | 4.1 | 1.8 | ||||||||||||||
Adjusted EBITDA (Non-GAAP) | $ | 80.7 | $ | 88.0 | ||||||||||||
Adjusted EBITDA Margin (Non-GAAP) | 25.7 | % | 26.7 | % | ||||||||||||
Totals may not sum due to rounding | ||||||||||||||||
1 Includes acquisition related expenses and expenses associated with the Separation. | ||||||||||||||||
2 Related party interest with | ||||||||||||||||
CRANE NXT, CO. AND SUBSIDIARIES Non-GAAP Financial Measures by Segment (unaudited, in millions) | |||||||||||||||
Three Months Ended | Crane Payment Innovations | Crane Currency | Corporate | ||||||||||||
Net sales | $ | 209.0 | $ | 104.6 | $ | — | $ | 313.6 | |||||||
Operating profit (loss) (GAAP) | $ | 52.7 | $ | 20.2 | $ | (17.5 | ) | $ | 55.4 | ||||||
Operating profit margin (GAAP) | 25.2 | % | 19.4 | % | 17.7 | % | |||||||||
Special items impacting operating profit: | |||||||||||||||
Intangible asset amortization | 5.3 | 3.6 | — | 8.9 | |||||||||||
Restructuring charges, net | 2.7 | — | — | 2.7 | |||||||||||
Transaction related expenses1 | — | — | 4.1 | 4.1 | |||||||||||
Adjusted operating profit (loss) (non-GAAP) | $ | 60.7 | $ | 23.8 | $ | (13.4 | ) | $ | 71.1 | ||||||
Adjusted operating profit margin (non-GAAP) | 29.0 | % | 22.8 | % | 22.7 | % |
Three Months Ended | Crane Payment Innovations | Crane Currency | Corporate | ||||||||||||
Net sales | $ | 223.8 | $ | 105.3 | $ | — | $ | 329.1 | |||||||
Operating profit (loss) (GAAP) | $ | 61.8 | $ | 17.6 | $ | (13.5 | ) | $ | 65.9 | ||||||
Operating profit margin (GAAP) | 27.6 | % | 16.7 | % | 20.0 | % | |||||||||
Special items impacting operating profit: | |||||||||||||||
Intangible asset amortization | 5.5 | 3.6 | — | 9.1 | |||||||||||
Transaction related expenses1 | — | — | 1.8 | 1.8 | |||||||||||
Adjusted operating profit (loss) (non-GAAP) | $ | 67.3 | $ | 21.2 | $ | (11.7 | ) | $ | 76.8 | ||||||
Adjusted operating profit margin (non-GAAP) | 30.1 | % | 20.1 | % | 23.3 | % | |||||||||
Totals may not sum due to rounding | |||||||||||||||
1 Includes acquisition related expenses and expenses associated with the Separation. | |||||||||||||||
CRANE NXT, CO. AND SUBSIDIARIES Free Cash Flow and Adjusted Free Cash Flow (unaudited, in millions) | ||||||||
Three Months Ended | ||||||||
Cash Flow Items | 2024 | 2023 | ||||||
Cash provided by operating activities (GAAP) | $ | 9.5 | $ | 35.5 | ||||
Less: Capital expenditures | (12.5 | ) | (4.0 | ) | ||||
Free cash flow | $ | (3.0 | ) | $ | 31.5 | |||
Transaction related expenses1 | 1.3 | 1.8 | ||||||
Adjusted free cash flow (non-GAAP) | $ | (1.7 | ) | $ | 33.3 | |||
Adjusted net income (non-GAAP)* | $ | 49.2 | $ | 55.4 | ||||
Adjusted free cash flow conversion (non-GAAP) | (3.5 | )% | 60.1 | % | ||||
1 Represents cash paid for transaction related expenses which includes acquisition related expenses and expenses associated with the Separation. | ||||||||
*Please see the Non-GAAP Financial Measures tables in this release. | ||||||||
Net Leverage Ratio (unaudited, in millions, except net leverage ratio) | ||||
Total debt (excluding deferred financing costs of | $ | 679.3 | ||
Less: Cash and cash equivalents | (220.6 | ) | ||
Net debt | $ | 458.7 | ||
TTM Adjusted EBITDA (non-GAAP)* | $ | 381.0 | ||
Net leverage ratio | 1.2 | |||
*Please refer to the Non-GAAP Financial Measures tables in prior quarter releases and in this release. | ||||
Crane NXT reports its financial results in accordance with
Reconciliations of certain forward-looking and projected non-GAAP measures, including Adjusted segment operating margin and Adjusted EPS, to the closest corresponding GAAP measure are not available without unreasonable efforts due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures, which could have a potentially significant impact on Crane NXT's future GAAP results. Crane NXT calculates Adjusted segment operating margin and Adjusted EPS as described below.
- "Adjusted segment operating margin" is calculated as Adjusted segment profit divided by sales. Adjusted segment profit is calculated as segment profit excluding intangible asset amortization, restructuring charges, and transaction related expenses.
- "Adjusted EPS" is calculated as Adjusted net income divided by diluted shares. Adjusted net income is calculated as net income excluding intangible asset amortization, restructuring charges, transaction related expenses, and including the tax effect of these adjustments and other discrete tax items.
The Company's management believes that each of the following non-GAAP measures provides useful information to investors regarding the Company’s financial conditions and operations:
- "Adjusted operating profit" and "Adjusted operating margin" add back to operating profit items which are outside of the Company's core performance, some of which may or may not be non-recurring, and which management believes may complicate the interpretation of the Company’s underlying earnings and operational performance. These items include income and expense such as: intangible asset amortization, restructuring charges, and transaction related expenses. These items are not incurred in all periods, the size of these items is difficult to predict, and none of these items are indicative of the operations of the underlying businesses. Management believes that non-GAAP financial measures that exclude these items provide investors with an alternative metric that can assist in predicting future earnings and profitability that are complementary to GAAP metrics.
- "Adjusted net income" and "Adjusted EPS" exclude items which are outside of the Company's core performance, some of which may or may not be non-recurring, and which management believes may complicate the presentation of the Company’s underlying earnings and operational performance. These measures include income and expense items that impacted operating profit such as: intangible asset amortization, restructuring charges, transaction related expenses, the tax effect of these items and other discrete tax items. Additionally, these non-GAAP financial measures exclude income and expense items that impacted net income and earnings per diluted share such as related party interest with
Crane Company incurred prior to the Separation. These items are not incurred in all periods, the size of these items is difficult to predict, and none of these items are indicative of the operations of the underlying businesses. Management believes that non-GAAP financial measures that exclude these items provide investors with an alternative metric that can assist in predicting future earnings and profitability that are complementary to GAAP metrics.
- “Free cash flow,” “Adjusted free cash flow” and "Adjusted free cash flow conversion” provide supplemental information to assist management and investors in analyzing the Company’s ability to generate liquidity from its operating activities. The measure of free cash flow does not take into consideration certain other non-discretionary cash requirements such as, for example, mandatory principal payments on the Company’s long-term debt. Free cash flow is calculated as cash provided by operating activities less capital expenditures. Adjusted free cash flow is calculated as free cash flow adjusted for certain cash items which management believes may complicate the interpretation of the Company’s underlying free cash flow performance such as certain transaction related cash flow items. Adjusted free cash flow conversion is calculated as Adjusted free cash flow divided by Adjusted net income. These items are not incurred in all periods, the size of these items is difficult to predict, and none of these items are indicative of the operations of the underlying businesses. Management believes that non-GAAP financial measures that exclude these items provide investors with an alternative metric that can assist in predicting future cash flows that are complementary to GAAP metrics.
- "Adjusted EBITDA" and "Adjusted EBITDA margin" exclude net interest expense, tax expense and depreciation and amortization expense from net income, as well as Special items such as restructuring charges, and transaction related expenses. Management believes that non-GAAP financial measures that exclude these items provide investors with an alternative metric that can assist in predicting future earnings and profitability that are complementary to GAAP metrics.
- "Net leverage ratio" refers to Net debt divided by trailing twelve months (TTM) Adjusted EBITDA. "Net debt" represents total debt (excluding deferred financing costs) less cash and cash equivalents. Management believes that these non-GAAP financial measures provide useful information about our ability to satisfy our debt obligation with currently available funds.
- References to "core," such as "core sales," exclude currency effects and, where applicable, the first-year impacts of acquisitions and divestitures. Management believes that non-GAAP financial measures that exclude these items provide investors with an alternative metric that can assist in identifying underlying growth trends in our business and facilitate comparison of our sales performance, for example, with prior and future periods that are complementary to GAAP metrics.
Contact:
Vice President, Investor Relations
+1-781-755-6886
rima.hyder@cranenxt.com
Source: Crane NXT
2024 GlobeNewswire, Inc., source