Delivers sales growth of 14%; core sales growth increases 5%
Narrows full year Adjusted EPS guidance to $4.22 to $4.30
WALTHAM, Mass., Nov. 06, 2024 (GLOBE NEWSWIRE) -- Crane NXT, Co. (NYSE: CXT) ("Crane NXT" or the "Company"), a premier industrial technology company, today announced its financial results for the third quarter ended September 30, 2024.
Third Quarter 2024 Highlights
- Signed agreement to acquire De La Rue Authentication Solutions, with anticipated closing in the first half of 2025.
- Acquired the Smart Packaging assets of Tru Tag Technologies.
- GAAP earnings per diluted share (EPS) of $0.81, and Adjusted EPS of $1.16.
- Sales of $403 million, up 14.3% year-over-year, with 4.7% core sales growth.
- GAAP operating profit margin of 18.6%, and Adjusted operating profit margin of 23.9%.
- Repaid approximately $65 million of outstanding debt.
- Narrowing full year sales growth guidance to 6% to 8% and full year Adjusted EPS guidance to $4.22 to $4.30.
- Updating full-year guidance for Adjusted Free Cash Flow conversion to approximately 70%.
Mr. Saak continued: "Our third quarter results were in line with our expectations, with core sales growth of nearly 5% and adjusted operating profit margin of approximately 24%. We repaid approximately $65 million of outstanding debt in the quarter and reduced our net leverage to approximately 1.7X. With our strong balance sheet and operational performance, we have ample liquidity for disciplined M&A to create further value for our shareholders."
Summary of Third Quarter 2024 Results
| Three Months Ended September 30, | Change | |||||||||||||
| (dollars in millions) | 2024 | 2023 | $ | % | ||||||||||
| Net sales | $ | 403.5 | $ | 352.9 | $ | 50.6 | 14.3 | % | ||||||
| Core sales | $ | 16.7 | 4.7 | % | ||||||||||
| Acquisitions | $ | 32.3 | 9.1 | % | ||||||||||
| Foreign exchange | $ | 1.6 | 0.5 | % | ||||||||||
| Operating profit | $ | 75.0 | $ | 79.7 | $ | (4.7 | ) | (5.9 | )% | |||||
| Adjusted operating profit* | $ | 96.5 | $ | 91.6 | $ | 4.9 | 5.3 | % | ||||||
| Operating profit margin | 18.6 | % | 22.6 | % | (400bps) | |||||||||
| Adjusted operating profit margin* | 23.9 | % | 26.0 | % | (210bps) | |||||||||
| Totals may not sum due to rounding
*Please see the Non-GAAP Financial Measures tables in this release | ||||||||||||||
Third quarter 2024 sales were $403.5 million, an increase of $50.6 million, or 14.3%, compared with the third quarter of 2023, primarily driven by $32.3 million, or 9.1%, sales benefit from the acquired OpSec Security business, $16.7 million, or 4.7%, core sales growth, and $1.6 million, or 0.5%, favorable foreign exchange.
Third quarter 2024 operating profit was $75.0 million, compared with $79.7 million in the third quarter of 2023. Operating profit margin was 18.6%, compared with 22.6% last year, primarily reflecting an unfavorable product mix, and the impact of the OpSec Security acquisition, partially offset by productivity gains, and the impact of cost saving actions. Adjusted operating profit margin of 23.9% decreased 210bps, compared with 26.0% in the prior year.
Third Quarter 2024 Segment Results
All comparisons detailed in this section refer to operating results for the third quarter 2024 versus the third quarter 2023.
Crane Payment Innovations
| Three Months Ended September 30, | Change | ||||||||||||||
| (dollars in millions) | 2024 | 2023 | $ | % | |||||||||||
| Net sales | $ | 224.9 | $ | 221.6 | $ | 3.3 | 1.5 | % | |||||||
| Core sales | $ | 3.3 | 1.5 | % | |||||||||||
| Foreign exchange | $ | - | - | % | |||||||||||
| Operating profit | $ | 64.6 | $ | 59.7 | $ | 4.9 | 8.2 | % | |||||||
| Adjusted operating profit* | $ | 70.0 | $ | 65.1 | $ | 4.9 | 7.5 | % | |||||||
| Operating profit margin | 28.7 | % | 26.9 | % | 180bps | ||||||||||
| Adjusted operating profit margin* | 31.1 | % | 29.4 | % | 170bps | ||||||||||
| Totals may not sum due to rounding | |||||||||||||||
| *Please see the Non-GAAP Financial Measures tables in this release | |||||||||||||||
Security and Authentication Technologies
| Three Months Ended September 30, | Change | ||||||||||||||
| (dollars in millions) | 2024 | 2023 | $ | % | |||||||||||
| Net sales | $ | 178.6 | $ | 131.3 | $ | 47.3 | 36.0 | % | |||||||
| Core sales | $ | 13.4 | 10.2 | % | |||||||||||
| Acquisitions | $ | 32.3 | 24.6 | % | |||||||||||
| Foreign exchange | $ | 1.6 | 1.2 | % | |||||||||||
| Operating profit | $ | 29.3 | $ | 32.8 | $ | (3.5 | ) | (10.7 | )% | ||||||
| Adjusted operating profit* | $ | 39.2 | $ | 36.3 | $ | 2.9 | 8.0 | % | |||||||
| Operating profit margin | 16.4 | % | 25.0 | % | (860bps) | ||||||||||
| Adjusted operating profit margin* | 21.9 | % | 27.6 | % | (570bps) | ||||||||||
| Totals may not sum due to rounding | |||||||||||||||
| *Please see the Non-GAAP Financial Measures tables in this release | |||||||||||||||
Cash Flow and Other Financial Metrics
For the third quarter of 2024, cash provided by operating activities was $66.7 million, compared with $102.8 million in the prior year. Adjusted free cash flow was $59.0 million, compared with $97.5 million in the prior year. The $38.5 million, or 39.5%, decrease in Adjusted free cash flow was primarily due to lower cash provided by operating activities driven by higher working capital requirements impacted by the timing of shipments. (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 $165.1 million as of September 30, 2024, compared with $227.2 million as of December 31, 2023. Total debt was $793.2 million as of September 30, 2024, compared with $644.9 million as of December 31, 2023. The Company repaid $65.0 million on its revolving credit facility during the third quarter of 2024, with an outstanding balance of $150.0 million as of September 30, 2024. The decrease in cash and cash equivalents and the increase in total debt reflect the financing associated with the May 3, 2024 OpSec Security acquisition.
Full Year 2024 Guidance
The Company is updating its full year guidance for Sales Growth, Adjusted EPS, and Adjusted Free Cash Flow Conversion.
| Full Year 2024 Guidance Details | ||
| (dollars in millions, except per share data) | Prior Guidance | Updated Guidance |
| Crane NXT Sales Growth* | +5% to +8% | +6% to +8% |
| Adjusted EPS | $4.10 to $4.35 | $4.22 to $4.30 |
| Adjusted Segment Operating Margin | 26% to 28% | 26% to 28% |
| Corporate Expense | ~$53 | ~$53 |
| Non-Operating Expense, Net | ~$47 | ~$47 |
| Adjusted Tax Rate | ~21% | ~21% |
| Adjusted Free Cash Flow Conversion | ~100% | ~70% |
| Diluted Shares | ~57.6 | ~57.6 |
| *Includes FX impact of 0% to 1% | ||
| Please see the Non-GAAP Financial Measures definitions in this release | ||
Crane NXT announced its quarterly dividend of $0.16 per share for the fourth quarter of 2024. The dividend is payable on December 11, 2024, to shareholders of record as of November 29, 2024.
Conference Call
Crane NXT scheduled a conference call to discuss the third quarter financial results on Thursday, November 7, 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. Through its two industry-leading business segments, Security & Authentication Technologies and Crane Payment Innovations, Crane NXT provides customers with advanced technologies to secure high-value physical products, sophisticated detection equipment and systems, and proprietary products and services that protect brand identity and digital content. Crane NXT's approximately 4,500 employees help our customers protect their most important assets and ensure secure, seamless transactions around the world every day. 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.
(Financia