Crane NXT, Co. (NYSE: CXT) ("Crane NXT" or the "Company"), a
premier industrial technology company, today announced its
financial results for the first quarter ended March 31, 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.
Aaron W. Saak, Crane NXT's President and Chief Executive
Officer, stated: "In the first quarter, we made meaningful progress
advancing our strategy and executing on our plan to grow sales to
$3 billion by 2028. With the acquisition of OpSec Security, we
believe we have an industry-leading portfolio of digital and
physical authentication and brand protection solutions,
strengthening our position as a market leader providing trusted
technology solutions to secure, detect and authenticate our
customers’ most valuable assets."
Mr. Saak continued: "Our first quarter results were in line with
our expectations as our core businesses delivered solid operational
performance, and we are reaffirming our Adjusted EPS guidance for
the full year. As we look ahead, we remain focused on driving
profitable growth and creating shareholder value. We will also
continue to leverage our strong balance sheet to further expand and
diversify our portfolio through disciplined, strategic
M&A."
Summary of
First Quarter
2024 Results
|
|
Three Months Ended March 31, |
|
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 $313.6 million, a decrease of
$15.5 million, or 4.7%, compared with the first quarter of 2023.
The sales decrease was comprised of core sales decline of $13.9
million, or 4.2%, primarily driven by lower volumes at Crane
Payment Innovations (CPI), and unfavorable foreign exchange of $1.6
million, or 0.5%.
First quarter 2024 operating profit was $55.4 million, compared
with $65.9 million in the first quarter of 2023. Operating profit
margin was 17.7%, compared with 20.0% last year, primarily driven
by lower sales at CPI, and acquisition related expenses, partially
offset by favorable pricing and productivity. Adjusted operating
profit margin of 22.7% decreased 60bps, compared with 23.3% in the
prior year.
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 March 31, |
|
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 $209.0 million decreased $14.8 million, or 6.6%,
compared with the first quarter of 2023, primarily driven by 5.6%
core sales decline and 1.0% of unfavorable foreign exchange.
Favorable pricing was more than offset by lower volumes as CPI's
gaming customers adjusted inventory levels to reflect reduced lead
times. Operating profit margin of 25.2% decreased 240 basis points,
compared with 27.6% last year, primarily reflecting unfavorable
product mix and lower volumes, partially offset by favorable
pricing and productivity gains. Adjusted operating profit margin
was 29.0% compared with 30.1% in the prior year.
Crane Currency
|
|
Three Months Ended March 31, |
|
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 $104.6 million decreased $0.7 million,
or 0.7%, compared with the first quarter of 2023, primarily driven
by lower volumes in the U.S. Currency business, partially offset by
0.6% favorable foreign exchange. Operating profit margin was 19.4%
compared with 16.7% last year, primarily reflecting favorable
product mix and higher pricing partially offset by lower volumes.
Adjusted operating profit margin was 22.8% compared with 20.1% in
the prior year.
Cash Flow and Other Financial
Metrics
For the first quarter of 2024, cash provided by
operating activities was $9.5 million, compared with $35.5 million
last year. Adjusted free cash flow was $(1.7) million, compared
with $33.3 million last year. The $35.0 million, or 105.1%,
decrease in Adjusted free cash flow was primarily due to higher
cash used for working capital requirements, higher capital
expenditures to support the U.S. currency redesign program and
other capital projects, and lower net income. (Please see the
Non-GAAP Financial Measures tables in this release for a detailed
reconciliation of reported results to adjusted measures).
The Company held cash and cash equivalents of
$220.6 million as of March 31, 2024, compared with $227.2
million as of December 31, 2023. Total debt was $669.8 million
as of March 31, 2024, compared with $644.9 million as of
December 31, 2023. The Company repaid $0.7 million of its term loan
facility as of March 31, 2024, with an outstanding balance of
$104.3 million. The Company drew down $25 million on its revolving
credit facility as of March 31, 2024.
Full Year 2024 Guidance
The Company is updating its initial full year guidance provided
on February 14, 2024, for certain metrics to include the
acquisition of OpSec Security. There is no change to the core sales
growth guidance for Crane NXT's segments, CPI and Crane Currency,
provided on February 14, 2024.
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 |
$4.10 to $4.35 |
$4.10 to $4.35 |
Adjusted Segment Operating
Margin |
27% to 29% |
26% to 28% |
Corporate Expense |
~$53 |
~$53 |
Non-Operating Expense,
Net |
~$37 |
~$47 |
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 $0.16 per share
for the second quarter of 2024. The dividend is payable on June 12,
2024, to shareholders of record as of May 31, 2024.
Conference Call
Crane NXT scheduled a conference call to discuss the first
quarter financial results on Thursday, May 9, 2024, at 10:00 A.M.
(Eastern). Interested parties may listen to a live webcast of the
conference call by visiting the Events section of the investor
relations section of the Company’s website. For those wishing to
participate in the Q&A session of the call, please pre-register
here. Pre-registration may be completed at any time up to the call
start time. An accompanying slide presentation and a replay of the
live event will also be available on the Company’s website.
About Crane NXT, Co.
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 the United States, the United Kingdom,
Mexico, Japan, Germany, Sweden, and Malta. For more information,
visit www.cranenxt.com.
On April 3, 2023, Crane NXT, Co. (formerly Crane Holdings, Co.)
completed the separation of its wholly-owned subsidiary at that
time, Crane Company, in a tax-free distribution of Crane Company
shares to Crane NXT stockholders (the "Separation").
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 U.S.;
being unable to successfully develop and introduce new products,
which would limit its ability to grow and maintain its competitive
position; loss of personnel or being able to hire and retain
additional personnel needed to sustain and grow its business as
planned; being unable to identify or complete acquisitions, or to
successfully integrate the businesses the Company acquires;
governmental regulations and failure to comply with those
regulations; risks from litigation, claims and investigations,
including those related to product liability and warranties, and
employee, commercial, intellectual property and environmental
matters; risks related to its ability to improve productivity,
reduce costs and align manufacturing capacity with customer demand;
the ability to protect its intellectual property; significant
competition in the Company's markets; adverse impacts from
intangible asset impairment charges; additional tax expenses or
exposures; inadequate or ineffective internal controls; and risks
related to the Separation, including not obtaining the intended tax
treatment of the Separation transaction, failure of Crane Company
to perform under the various transaction agreements and actual or
potential conflicts of interest with Crane Company.
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 December 31, 2023 and the other documents
Crane NXT, Co. and its subsidiaries file from time to time with the
SEC. These filings identify and address other important risks and
uncertainties that could cause actual events and results to differ
materially from those contained in the forward-looking
statements.
(Financial Tables Follow)
CRANE NXT, CO. AND
SUBSIDIARIESConsolidated and Combined Condensed
Statements of Operations Data(unaudited, in millions,
except per share data) |
|
|
Three Months Ended March 31, |
|
|
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. at April 3, 2023. |
|
CRANE NXT, CO. AND
SUBSIDIARIESConsolidated and Condensed Balance
Sheets(unaudited, in millions) |
|
|
March 31, 2024 |
|
December 31, 2023 |
Assets |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
220.6 |
|
|
$ |
227.2 |
|
Accounts receivable, net of
allowance for credit losses of $13.8 as of March 31, 2024 and
$11.8 as of December 31, 2023 |
|
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 |
|
Goodwill |
|
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 |
|
U.S. and foreign taxes on
income |
|
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
SUBSIDIARIESConsolidated and Combined Condensed
Statements of Cash Flows(unaudited, in millions) |
|
|
Three Months Ended March 31, |
|
|
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
$0.1 million and $0.0 million as of March 31, 2024, and March
31, 2023, respectively. Non-current restricted cash, included
within “Other assets” in our Unaudited Consolidated and Combined
Condensed Balance Sheets, was $6.2 million and $0.0 million as
of March 31, 2024, and March 31, 2023, respectively. |
|
CRANE NXT, CO. AND SUBSIDIARIESOrder
Backlog (unaudited, in millions) |
|
|
|
March 31,2024 |
|
December 31,2023 |
|
September 30,2023 |
|
June 30, 2023 |
|
March 31,2023 |
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 SUBSIDIARIESNon-GAAP
Financial Measures(unaudited, in millions, except per
share data) |
|
|
|
Three Months Ended March 31, |
|
|
|
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 Company incurred prior to the Separation. |
|
|
|
|
|
CRANE NXT, CO. AND SUBSIDIARIESNon-GAAP
Financial Measures by Segment(unaudited, in millions) |
|
Three Months Ended March 31, 2024 |
Crane Payment Innovations |
|
Crane Currency |
|
Corporate |
|
Total Company |
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 March 31, 2023 |
Crane Payment Innovations |
|
Crane Currency |
|
Corporate |
|
Total Company |
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 SUBSIDIARIESFree Cash
Flow and Adjusted Free Cash Flow(unaudited, in
millions) |
|
|
|
Three Months Ended March 31, |
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) |
|
|
|
March 31, 2024 |
|
Total debt (excluding deferred financing costs of $9.5
million) |
|
$ |
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 U.S.
generally accepted accounting principles (“GAAP”). This press
release includes certain non-GAAP financial measures, including
Adjusted operating profit, Adjusted operating margin, Adjusted EPS,
free cash flow, and Adjusted free cash flow, that are not prepared
in accordance with GAAP. These non-GAAP measures are an addition,
and not a substitute for or superior to, measures of financial
performance prepared in accordance with GAAP and should not be
considered as an alternative to operating income, net income or any
other performance measures derived in accordance with GAAP. The
Company's management believes that these non-GAAP measures of
financial results (including on a forward-looking or projected
basis) provide useful supplemental information to investors about
Crane NXT. However, there are a number of limitations related to
the use of these non-GAAP measures and their nearest GAAP
equivalents. For example, other companies may calculate non-GAAP
measures differently or may use other measures to calculate their
financial performance, and therefore the Company's non-GAAP
measures may not be directly comparable to similarly titled
measures of other companies.
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:Rima HyderVice President, Investor
Relations+1-781-755-6886rima.hyder@cranenxt.com
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