CR - Earnings call transcript Q2 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings and welcome to the Crane Co.

Second Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions].

conference recorded. this reminder a is being As

It Mr. Relations. Jason my pleasure Thank your host, to introduce Feldman, is now you. Director of Investor

You begin. may

Jason Feldman

Thank we Feldman, Director to Investor Relations. everyone. earnings good call conference Mitchell, of you, this our our quarter morning, release Jason second Max XXXX Welcome I'm call. On operator, and have our day, after Maue, start President and few which Officer. President We'll off and questions. call Vice will prepared Chief Executive we remarks, our Officer; to respond Chief Senior and a our Rich with Financial

subsequent call, we which available Just and the using to will Also the our statements. on Relations GAAP reminder, non-GAAP the numbers are end include the in which slide Report, release a tables filings may accompanying language in during and section. website some be cautionary presentation, statements. comments bottom press comparable pertaining you Investor make numbers, refer to are also this earnings our of Annual reconciled at on and of We forward-looking the our to call and at of at forward-looking www.craneco.com release our we the the some both XX-K

call Max. over turn Now me let the to

Max Mitchell

you, Thank Jason.

X% Crane's EPS, year. Sales last of release I'm slight outlined our growth divestiture second last and exchange a of compared the than core in with of quarter more unfavorable up As foreign headwind. press to $XXX excluding was XX% decreased pleased second to $X.XX, night, offset items report X% quarter special earnings X% by in million

improved very Adjusted margin extremely from XX.X% performance three our to payment operating items Electronics, Fluid points and by our Aerospace platforms. profit, excluding X% of special with with across XXX headwinds year to last very primary challenging strong expectations, was and across led Operating million. strong basis $XXX line growth & growth in margins and comparisons. Core merchandising due to increased expected Handling

to explained have like the go approach on recent I the detail we our and felt our public. Certainly more we on provide make I offer previously some for why businesses, to would but Before our atypical, responsibility need CIRCOR. comments was

a thankful just tender, the of shareholders At two-thirds result. CIRCOR from supporting CIRCOR's process. had to remarkable at of remain and types the rebuke we stronger expiration they CIRCOR these offer, shares We the of, support for a situations, was Board unheard we me for plans over of almost of submitted throughout in There to issued and as typical a than shareholders a are any strikes statement minimum extremely very interest best received that much for open this stunning value creation. the disingenuous. their transaction yesterday CIRCOR our

called contact We've attempted I've CEO and repeatedly, yesterday. even weekend emailed their the CIRCOR over many times. to and

years. if [PDVSA] maximize of brand Company that. one hope great engage we the sale interest is even a consider advisors we they their to Crane contacted this potential that buyers that no than week, won't than if They they asset our reached further throughout process engage have last were made avail. $XX we of Our worth for calls. nominal we never all and offer might most more financial to -- more return announced CIRCOR last about value. sale assets CIRCOR as demonstrate the bankers divest that looks have products clear for acquirers, We've process would will to throughout the logical process. had in I Further the value a our shareholder including also of This paying a and is with out many an to would the our amount. Despite it position

of how a CIRCOR's refuse our two-thirds potential with can public a with in and even affirmatively company governance spoken with shareholder to engagement. acquisition and of party, we're and good our economics fit made with perplexed engagement simply supporting that believe that We particularly at excellent criteria. age and interested views, Crane loudly support day speak the an sense this have that remain or shareholders have deal for and strategically of transaction. level Regardless been long consistent CIRCOR an standing I would

with are leave to transaction key closing window the there However, I few for rapidly, a with. want very potential you a messages

we pursue actively. inorganic to growth continue First, will

$X across pipeline platforms, including three M&A our acquisitions. other of all those our targeted billion, we're public is Our now to opportunities of actively both and range primary $XXX full on growth working targets. potential And within million many private

balanced will as pursue we to remain will we while Second, capital acquisitions disciplined actively our continue deployment, valuation. part of in

for a and had financial criteria unchanged not have These we many compromise strict set on are of years. them. will We

business through we scale improving acquisitions drive of because third, performance to more are can for And shareholders by operating know we system, committed as well acquired our as consolidation. differentiated we actively pursuing adding value companies through application that our the of

As we term growth primary platforms, well. long businesses in we strong are optionality. keep also have more our creating with build across we mind, underlying organic significant scale And as three portfolio opportunities

half previously points gains. initiatives comments as will of and share starting more to our was compared X% facility continues I to with team few organic about Now, both The execute businesses, fantastic which had announced Adjusted from our consolidations. improved which Fluid each of on growth, margins, a XXX well than last well as quarter. a roughly Handling, make basis year growth

core guidance what over next confident challenging and the of growth on more we deliver our become in today, comparisons on few know X% segment previously ability to remain we margins. based sales quarters While XX% our issued

expectations. technology, merchandising with were in our results line quarter's the and payment A

retail at trends particularly see to continue vertical. business, further very our cash Payment We the in supporting automation strong

opt challenges. its to and and labor customized addition more In seeing are self checkout, helping traditional driving solutions with productivity staffing we more for retailers

as an customer comparisons last And to all we As this the challenging positioned well you Currency single leader on we long for are large to in had the to year. in the industry related capitalize extremely continue space, know, trend term. extremely

Sweden great is business Malta. to this initiatives our the and However, facility note is on from productivity benefiting making from printing move of bank progress

from pursuit of a In after just large Governor see meeting products our country opportunities how ahead the we made awarding Malta that in the And due months can in very acquired diligence has and of due business rating be with XX business, very team I driving pleased us. Currency. dependent, facility customers. but progress a in since came we about is fact, additional new new Central I'm this This specifically the Crane project to the We're of much excited of Bank I'm lumpy new part growth, the us with new their back technical visits. also

Aerospace strong & entire broad based demand exceptional strength quarter. Electronics an had the It across business. continued with

quarter Paris once the business several as our incredible existing from of technology Air the Our well reflects where and very on opportunities just even benefits team years, for one returned insertion as consistent Show, is strong from strong We growth, last customers team. in over again the the with execution performance platforms. engineers from new our identifying

are also report this hope For Wireless to example, involving were product during our we door aircraft I'm for application we military of the upgrade System. show, similar Pressure military that the we announced SmartStem modernization also pleased other across opens aircraft. this We signs large Boeing awarded Tire that platform, program a recently well as how driving aerial more T-X control in were system for the for system. investments on our These jet profitable control as business. the long the system the training just continued awarded technology brake term MQ-XX refueling is of brake unmanned returns

longer dealers, of coming in Materials continued with delivered to results the but out the expectations and environment. execute is At this And until well line than last our team correction expected continues it our under retail to be will rebalanced taking likely in from pressure a by correct. fully end inventory the our Engineered point, Sales remain of year, not quarter. destocking challenging

what's across to to continue cycle macro closely, will economy North will this be stay while watch generally demand of to been along the indicator historically in channel, with the businesses We And one appears American continue early space to or short Crane. softening. other occurring in we very trends healthy remain has close

know I'm deliver for confident $XXX in our excluding very cash on our of to flow surprises, EPS, to our we and economic with items million. on pleased new Based of Overall, for and million guidance any what special and ability as as $X.XX $XXX our remain $X.XX today position XXXX free current we to results beyond. barring well

commentary. turn financial let Rich, some me it over you to for additional

Rich Maue

Thank you, good Max, and morning, everyone.

on well excluding driving start, across I repositioning. executing As will segment slide shown Fluid in consistently remain usual, comments our XXXX quarter successfully release items the with Handling, impressed be XXXX, special very to outlined as our second how growth while balanced pleased and To I'll and teams have presentation. they that press of who compare providing

sales quarter, year, In reflecting partially divestiture of the profit reflecting operating to Handling $XXX XX.X%, growth $XX sales impact. X%, increased increased small operating foreign second a unfavorable offset compared volumes X% to X%, with productivity. basis by last of increasing XX% XXX of Handling of Fluid higher exchange points million margins and million, Fluid and core

growth very strong $XXX of actions XXXX $XXX of execute well million at million the at end and backlog leverage end on at by year. $XXX Handling initiatives. last compared to the by team This driving repositioning continuing end of the the as again, quarter, performance was a as very June was operating to in June strong Fluid the order of million

relatively seen improved for across softening growth all also of few described as X% to year. businesses, backlog foreign core the to sequentially and declined X% adjusting generally well remain process compared we Day holds, with sequentially the both foreign what saw we commercial positive a our and incrementally adjusted similar side. we our activity. X% spotty quarter, that of orders the as Investor for last year-over-year and conditions Market declined still exchange, In characterization on After the have exchange to markets X% while steady, at signs order

approximately our levels still in-line our activity and the full expectations consistent demand in necessary the quarter guidance. us with Order for achieve year to with was

million X% sales X% a prior small Technologies, driven by and declined year, Merchandising of foreign decline, unfavorable an to impact. $XXX & Payment Our exchange compared the XX% divestiture of core

year. and was benefits than from $XX basis and year, Core savings related the Merchandising team. lower more million at performance the although with of the repositioning acquisition the costs decreased from growth productivity, Crane profit X% year at last comparisons more from a Currency by mix. from rose offsetting impact offset operating than Segment by challenging large An XX.X% of unfavorable last volume single XX customer and CPI margins of exceptional of last points non-repeat

extremely At retail growth our is still driver. CPI strong an business,

well. traditional in we time, Over to well expect as are seeing as for expand We lot automation the other a checkout demand self customized as strong of North market, retail solutions. more American regions solutions off-the-shelf opportunities both to for globally for

continues new extremely US its the Germany. business gaming, well growth as following initiative, to in are continue while some well execute gaming well share to development Our we more market changes in conditions a the in and as UK all legislative in on little and services gain the and in transportation financial Europe quarter. product Vending, performed market casino challenging

Crane been performing are well to to also At pursue as and are opportunities of ahead as development on The the product well we and Currency, execute we customers about we has productivity new initiatives. excited new we continuing have us. continue business

large all be you last customer unpredictable. can business with be lumpy as saw can orders timing year, whose very However, this

by sales balance & sides spares. that of very become commercial increased Aerospace to challenging of as the but remember similar the and operating comparisons by margins And I aftermarket leverage. solid million, the continue the expect core markets both driven year accompanied more $XXX remain robust business. progresses, end and and with commercial sequentially increased improve the Electronics year. Strength Total on the for XX% military to military sales X% growth was sales

brake advanced mid Total year based platforms. the advanced and they're long up well team on to teens for with range the future. in across the OE mid roadmap, several continues X% wireless this commercial sales in microwave up range, technology increased also strength military is a focused compared OE positioning The OE digit in demand broad last was extremely single areas. in across business other environment, strong our controls, specifically Investment in sensing, systems and term electrification, but executing

$XXX improvements and structure a through initiatives, XXXX We other executing on Electronics million example repositioning at million improvement another also driving million end well of and backlog while growth June, of continuous actions. to the cost the the also to repositioning Aerospace & drive of end $XXX of end and productivity at June $XXX was at team compared last year. continue of

declined sales in volumes. $XX a Operating decline Material XX.X%, Engineered to vehicle million, margins decreased customers. lower sales driven XX% result of to primarily by recreational a to as

easier decline end next channel be team do expect we by to few sales the largely Continued stabilize strong the expect of performance by and We complete quarters period. inventory to the on the over RV challenging the a correction during year. comparisons the

our to guidance. now detail total more Turning company on and results

quarter second quarter the was compared second rate year. of tax Our last XX.X% in XX.X% to

year was $XX of the We the continue to last rate $XXX full original approximately flow free cash flow includes attach guidance. to with strong items expect consistent of in we last quarter. a XX% a In The cash year. million second quarter, free compared our discussed quarter million reversal timing of the quarter

are billion actively of our of working of on are strength given next years. capacity and the We we the our M&A over comfortable with sheet $X about balance pipeline opportunities few

for future. year half confident and of in prospects the our first solid Again, a I'm the

will do feel to cadence fourth between earnings quarter do quarter our second surprises, that quarter from third of the to earnings continue we expect year's of timing projects. first half is we in provide while expect deliver second we somewhat guidance, levels I this it with out any call line earnings year However, on perspective, weighted that important macroeconomic not and Barring we certain quarterly a guidance. launch based with the be

Operator, to now question. our are take we first ready

Operator

of [Operator ahead. Our Brett Vertical is from Linzey first Partners. Thank go Instructions] Please you. coming question Research

Brett Linzey

and moderation the I kind slowed little to start quarter, of quarter. the of the any on the then that want the very Fluid maybe areas line you solid specific saw you've a to in mix noted low-single-digit vertical July Has your with -- more? down within continued and some Handling, in in trend on the orders, range that that specific have but bit top

Max Mitchell

sure. Yes,

we I saying largely aggregate year. year or Brett, what just the into in expected consistent by with forecast coming So start is -- off our full

no changes. So major shifts and

cadence we're rate the basis comparisons seen in quarter more consistent. we've so and And growth year, again, core is, core first declining X% of X.X% full a our and growth the guidance being the the Following the X% year, on holding half with for that difficult. second with what

frame to up. just So

we softness So full year are -- supporting guidance. here we our overall while positioning some did

did you of of about signs I some I'll view, and in-line say from on canceled, question year, projects, point that related process our a on we of project in some a talked chemical, become to our cancellation, softness not From at again, in specific areas give see some color projects large first the as trending, but we mainly answer would generally push we just and canceled. outs to something had beginning and booked project the with the expectations

Americas, view and point the Europe side, last a geographic US weakening MRO in of well. reducing has of of side. from say China from still a growth little distributors particular the to bit color bit view a From nice opportunities, that would the bit levels there and in slower both pretty process, inventory a slightly in the point as on On the so also time with US little seeing still I in a in the decelerating spoke. process much same we little some

point end And quarter commercial of might -- then from us From underlying here refining and answer project some help, was a market again, but perspective, demand, that little and still outs impacted does as a strong that it of imagine the quarter. power, an in weak; -- again view the actually for OK, point commercial Brett? in push us that chemical -- does decent, you

Brett Linzey

the just ideas small Maybe of to finer appreciate you that. here. plan-B it that's like something just and good in that sort Thanks. what's M&A, maybe currently guess, within then you a actionable medium yes, I size like what's the then are that the point concentration And little I maybe guys pivoting between And look Yes, have or on shifting larger? looks funnel size and to a bit range? preference your

Max Mitchell

it's are fairly looking We right -- across which acquisitions, it's now, were well segments. on very the intelligent as it's focus no to segments. drive size the fairly think interesting, I as balanced matter

Electronics. Handling, Payment each. Aerospace around we in there's and there's availability right no now are & Fluid Merchandizing and actionability and tracking and between preference strong So It's

Operator

Thank you.

UBS. is ahead. question from coming go of next Please Our Damian Karas

Damian Karas

a on share Handling. seeing maybe to weakness you're any growth I of most maybe on a was there in Fluid though a even perhaps made little bit? about little wondering could you're it's gains really side, Fluid you've you chemical comment been capturing Max, after or you that if of you able about now, gains, Handling? the driving around markets end where the elaborate just lines Any guys think color product the achieve share bit share, the

Max Mitchell

the fugitive some in as requirements higher value valued. that product we've some Yes, emissions some product as where chemical We the that petrochemical, we've share are well some added controls space by clearly customers, there. -- of new had in new with emissions some launched some that's introductions around seeing both gains, pharmaceutical in

geographic product So well I execution, it's up. how is new frame combination a as it of as would

Damian Karas

think you some gain forward? And continue could Okay. share to that going you

Max Mitchell

good. freight of like everyone gain so We're than of PMI, forth. From on everything tracking all solid, solid. right macro, share signs the Europe. US reading whether standpoint, broader a index, so feel some Markets we're else decelerating are think, still that Things orders more reading is now there economy volumes, it's are signs, I deceleration. is the some US around and

a we're it's just So seeing. question of what

we -- We're little the more he's bit A us through right. of pushing What for took as deceleration. a bit on projects mentioned, to just process little seeing? Rich are a seeing, little Now, side. of the

saw First cancellation. time we

that but indicators some things some slowing. not So are these were just bad,

with geographies, -- generally is industrial side, across process some BASF weakness. the out all general came On

Handling the that, of interesting spottiness of go what's is said across in the Fluid slowdown. if I having the rest also, So,

doing For like is flattish. particularly generally in mining, say example, activity. Middle side, Canadian It And well. softening recovery. depressed, remains you gold to distribution U.K. activity up, sands, good visibility, East tool we probably the bit Handling little if would of dramatic to exposure mining oil potentially business expected, solid, that on the some sector, European up the machine move pump have is the quite holding little other solid, Construction the commercial there. on over looks western, better not of I a than municipal little change. our that Fluid with then conditions businesses

flattish this industrial pump on the municipal, industrial general on on then, -- the showing as side. In side on construction And pump activity probably weakness up well.

So spots it's some Clearly, mixed. early Damian? supporting that this slowly as as our as Hope We've well bright markets. -- clearly of Rich got generally said, and solid full year sign helps decelerating. end

Damian Karas

wondering in That's potentially competitors follow across your to or that? your up One result shakeup the of there's market going sounded about have the relationships And have M&A, quite you segment, management environment portfolio of a bit the optimistic assets? a little does. in the three Max of seen you some changes there helpful Would growth a as any It color. and your it any through as you opportunities specifically is customers in on a works. relates changes with if those question currency? I'm interest

Max Mitchell

that technology No out. our differentiation, regardless through our those of continues and would that competitive continue to comment on moves our the delivery, play the execute our plan, our quality to service, say enhanced to value asset. driving all team of our I things any

Operator

you. Thank

coming is Matt next Davidson. from of Summerville Please go D.A. Our question ahead.

Matt Summerville

questions. of couple A

cadence. down give why the First, that driving quarter Rich earnings of seeing commented You level, if to to you fourth will? talk mentioned Can what's a little granularity split, quarter you're sort sort and and the third kind you more maybe your quarter? segment you of between of remark third the lopsidedness on just timing. the about fourth Can prepared

Rich Maue

Yes.

and granularity when actually the have So around we realize we've added what they'll terms the payment ship. I and would say, would been and that of in if of some there of the pursuing be that lumpiness opportunities

year, see what -- we from from relative balance move the that's so QX view. off. to it's So QX It's for all profile and we QX in here it's the to have growth that that all overall of in QX primary the point of QX,

QX XX% So, if total. you when you we that at look think to out there, roughly to that at, were at guidance you about in the look a it's we're midpoint year QX that if XX% have aggregation, full to

Matt Summerville

business Can the Sure, business. versus detail, of sticking maybe business? a merchandising out currency you bit single ex- side, the you're back with parse is little side the growing organic organically? contract? going year on that that more in business seeing the payment be in to CPI believe underlying up And one the that you it's you this then large the if Do out one large customer, the

Rich Maue

Sure.

international just excluding in view, notable space mean, just spot in has in etc. point. sign I this market on a Currency, but a So, and yes, would there within CPI, merchandising business, point the and the been, little not We're only market growth I that point space are half at the -- a performance. seeing you overall, but softness watching Gaming transportation We're I well retail not one performance, some going in there executing seeing one lot closely, through we quo, to in there would prepared spot of or following when the would particular initiatives most space. From I in in notable and it's of spotty year-to-date I not weak Venezuela, being vending, growth bit signs, of bottlers and particular weak the economy a core say year-over-year. that exceptional point that's be a really strong CPI them our it at heck business, spot status growth view, from mentioned growth But first the whole of the overall really growth. that only core the at solid can other look areas, then the say, is showed with we're still business in remarks, in the growth as the exceptional but a

Operator

you. Thank

question Group. go of Please from Research Robert is Our ahead. coming Buckingham Barry next

Robert Barry

point So like far line concerned, this are on put finer to at CIRCOR, as comments a maybe go you I about the no just the there, a as wanted point? bottom it's just

Rich Maue

Never everything say we've to possible engage. now never. Right feel we done

process, I of of engage. and have to end from There's If support do, can And think our engagement. that. stick something with what with spoken have all the to change the to Board the wishes shareholders. of we that asked clearly, of no, of plan. point that with at and to that to their were CIRCOR's in had no full engaged of and CIRCOR course entrenched had we CIRCOR Board welcome engagement, say, and we we day, The if certainly have shareholders them their can terms being CIRCOR defenses the the work do remain to continue would

continue as progress, likely. and less becomes one more it's of it to days Rob, So less

Robert Barry

actionable assume And pipeline, two? that comments are kind on fair Yes. a is there to sounds there of or the quarter it other are of there's the it I like -- mean, the activity fair next items amount there.

Rich Maue

would We say way we yes. hopes -- never can say affirmatively one another, but or would our say can I be never

Robert Barry

it. Got

line to half, like trying is their in both first are shifting to the first half Aero, it maybe sounds weaker for, Fluid tracking really sight than X%-ish it for or the is I the for makes materially and to have the that be that Fluid to grow given of the still both pertaining a up there about think being, of sense to softening I things guided Aero than Just back guides little, on are some think half. the to stronger mean something...? much would make fundamentals and sense are right the a side, way but

Rich Maue

No, I question, think good Rob. it's

right, be you're to into our right side, guidance Handling roughly going Fluid was. where the On we're

remember comps tougher we enter of as we year. have Just back that half the the

for So still, you I the implied growth the that our would we us to rate if be figure Electronics, is and guidance kept feel expect than higher X%. Aerospace & appropriate X%

end year. expect be range the the by So to high I would in the single-digit of us

Robert Barry

whether price tougher, get on perhaps ability cost, I'm or curious end help lastly of price any is you're little from seeing price environment the are Just And little bit? the if inflation of markets a to pricing sorry, signs side, kind on deflation? getting slowing a --

Rich Maue

-- job price Yes, on as the the so as overall, dealing a we cost. have the cost, have doing doing teams exposures on dynamic that movements been been tariff -- we've material fantastic with well

is holding. And area result We're in and price we the the for into relationship year-to-date continuing it. a be continuing that half been we to half. strategic the us seen see do targeted that in that and basis how in overall first the on we've overall has do So positive second

Operator

Thank you.

coming Our next question is of from go Jones Nathan Stifel. Please ahead.

Nathan Jones

few you've Rich billion on I'm got here going sounds it bit kind for an pipeline for up size, would M&A some of guys Really, of pretty sounds M&A you takes CIRCOR any get CIRCOR capacity period on there. of a fair to off more. next it. a the of circle like to again almost have beat today front. time? the of that couple say which to a sucked in over execute you the that, here full the mentioned all it of me if have little to you It there's table deals like things Is it extended executable basically years,

Max Mitchell

It's hard I to with say but deal accurate. think any you're conceptually size,

Nathan Jones

that, to don't to level to next comes that say any shareholders? Would if Just have you election when you CIRCOR might intention let's year? force six of any that approach kind up leave done it you'll next board you get something now over changes at the deals how the their nine of months? Is looking to

Max Mitchell

their continue forward, to monitor, to that our performance we'll Nathan on explore. path and CIRCOR think I No, and depending own continue

for not important our it's to think uncertainty I not of have Crane may continue linger, have do. where or may shareholders we us to certainty and

and we again, plans a just April absolutely situation, So they remain whatsoever you've but what to talk, fight long now, plans do said. if completely have in will have pursue unwilling but to this the no entrenched battle right we no certainly to we monitor

Nathan Jones

minute. a on wanted here Okay, fair move to just enough. to I for Engineered Materials

talked looks just have of guys done it's it here. bit comps to have that in more little destock rolled you're cycle year. about about here destocking looks the might You to mid-year, sounds little like It on thinking certainly than there bit over like a be now, it's going the expecting end the a channel. the It from

seeing. it What more I be possible you markets terms which here what little a think said, leading you're are maybe about in it's be? the there? the indicator can you end what outcomes seeing economically, bit talk could a softness of in As we of Can sell-through

Rich Maue

that don't materially think through to the taking core say quarter. changing is around would largely from growth the a We're I that do midway I last quarter. bit see be we going destocking start We believe year. to said our Yes, in that complete little fourth would see We is position longer.

in channel. do we here the we're through think So inventory getting that appropriately the

Max Mitchell

up In spot, soft terms the and transportation are is of building surprisingly. end markets, it's in RV. well, holding fairly products that actually This segment

Nathan Jones

Okay. Fluid I on got one more Handling margins.

we numbers half, first you XX revenue that Should cost the for costs had full are guide here second going you be execution XX.X flattish. about in points the that margin have -- half? it would half in in looks still down the the first should given be come positive to price expecting the year outperform half of around to you've basing about in year full that probably with like a be to assume input You're you little basis ahead I guide. actually the do having the fallen more second

Max Mitchell

our year It would Yes. at be -- a be I at better have higher than that. than Nathan. of be that. I XX% the little would the will bit we -- beginning expect provided We'll that guidance Yes, we'll modestly

Nathan Jones

of answer like short questions. kinds yes for I of those the

Okay, the very pass Thanks time. it much on. I'll for

Operator

you. Thank

is coming next of Kristine America Liwag Please Lynch. Bank from question go from ahead. Our Merrill

Kristine Liwag

Max.

As do Or be big Crane acquisition more that an you adding discuss where in at new diligence? your obvious you that do you evaluate when complete look evaluate payment you can want fit? Crane deals leg done acquisitions your interested is, you in on are pipeline, action, past years MEI the the through Currency a and transformed and there strategic another the main things at that may to you there's the to transformative due leg? a during business, like hurdles follow look you few And CIRCOR, you've to

Max Mitchell

opportunities now Merchandising just new as Electronics three segments right there's us fragmentation to the to Yes, as again core enough acquisition. Payment remind we those now. that and technologies, right believe within leg Handling, so and on no going well ask & focused Richard, in on very I'll strategy, Aerospace -- Kristine, stay we're Fluid our that

Rich Maue

right a what rate In how as risk at have appropriate value, then and ROIC, targets return years. terms perspective, is and adjusted at look a NPV from we three well an five Kristine, of the and we obviously positive for we that's

year So but might two year that three, year primary little depending those rate. at three and elements to that are ones. NPV. we by other but it's the look and that five, XX% we XX% risk ROIC at, adjusted stretch see like positive Again, to bit a There's the we'll a right

Kristine Liwag

guys on activity rate still you margins. that can that could look the XX% you incremental the I past around the at do When in at in Fluid one-time quarter, run so margins there in you're next tracking a also in margins, XX% you Fluid think you're least get to going XX% And expect -year of on items even get million were have that And mentioned Fluid first, then any contributed with kind slowdown in second, Thanks. basis, adjusted that you $XXX of forward? revenue you that? to year-over an seeing, order

Rich Maue

nothing in actions. on repositioning unusual, so quarter it's the us the executing Yes, just

here holds the going XX.X%, of beginning You're like into think now, already quarter, XX.X% the last little that quarters by layer are bit I the year the maybe year. said variety that I And I different. than achieving this the the in end incrementals would they'll of here, range end we're before there that say initiatives, XX% right did to on there, expect a what of we productivity of things executing so different higher think a our said. as would and we're repositioning we we you're we'd and so year, at still clearly so get already see -- we at

going a a pretty leverage rates pretty long in we're to a -- order With we're growth at rate. the environment, as at solid as

Kristine Liwag

And Thanks. me. lastly for

cash in viable the would you're targets shareholders? not two, find more next able or any to to consider If returning year you

Max Mitchell

is evaluate. deployment shareholder our is capital we allocation always of and and of analysis equation Always that part part return,

Operator

Thank you.

ahead Our Please of Ken go Herbert next question is Canaccord. coming from with your question.

Ken Herbert

or can from Max strong you benefited talk looked Can -- mix. quarter? first much somewhat to or and you about just maybe segment? ask in mix the in benefit like Richard quarter about much in the anything wanted Aerospace in contributed clearly you Electronics margins one -- the you a maybe the & to -- how very margins, looks it quarter Or of how else, was of that time unique

Rich Maue

the quarter, was Yes, to know. overall it at and tied largely it you was in mix it was as in aftermarket -- the that when performance the looking regard

off was benefits the the were unique recorded in the quarter. in that that driver So Ken No quarter. primary one

Ken Herbert

it commentary, assumptions significant I any to full the back year full at Investor the January provided segment, Okay, in barring the guide of change, fair should the and Day? mean, similar as is you look, year margin assume be for that ahead

Rich Maue

lot Yes, we finish XX.X% the not I heck would -- guide whole stronger a stronger to but than of that had, stronger stronger, than we year. on think, we'll a expect the finish

Ken Herbert

can Thanks. just very sort in should and coming very the timing seeing think where background it's a another getting you're in the where & you terms of in and again backlog -- shipped, this Aerospace growth I into and year how on of great. ago, good into we timing any Electronics, of from year and flowing Okay, detail against about strong that growth mean, of more strength of deliveries? maybe growth another and quarter XXXX provide the And what's what's the

Rich Maue

seeing rolling bit been We're lot a over are six seeing the different side area defense opportunities the some tougher. -- the backlog in of has Yes, right. of nice portion it little months Power a growth from it's call, in large A in. spots, we're the it seeing seeing where we're -- come that last we're the on Defense Power, so

I aware of they're the we're would coming on on that you're from that -- -- coming a basis platforms know the say well on. commercial rates are through order through I year-to-day

as heck how guidance on prepared So broad at think this really at I'm come would give on year we're give and we a I they next point, But the back strength to whole that a XXXX, the on seeing lot I into Ken. that let is not cascade that when us on side, the commercial we of and defense the aftermarket side, overall to it granularity that you message the on leave side, OE and you do January. in side here

Ken Herbert

more If get helpful. your could, may little question. we you're I mean, potential final maybe that's one again sounds the it to or just Can us or you about finally Brexit. implications around certainty how exposure I for as or that Okay, a like on start thinking just level business direction impact? your set

Rich Maue

it's our is of -- mean, I Handling part business whatever on comes side, exposure, where primary say the on of Fluid -- side. commercial have so right, Handling we again our Yes, there the it, would part Fluid spot of exposures the an a I

a susceptible. be having we about area a have and it exports big But UK the impact most we that as the business that next would year it's this honestly, of think balance or has see on don't us We year.

Operator

Mitchell back this turn the over time, to Thank closing you. like Max for comments. floor would I At to

Max Mitchell

thank your a improving had and base positioning first thank our year the Thank cost driving very Crane half you, the for growth, morning. all time -- and of this future. for solid you We operator,

the a team the offer are of the our Crane system. and results an strength Our business It of to with testament eventful quarter also the Crane value was for CIRCOR.

that remain strategically approach moves, prepared to the and outcome, disciplined, should with make While reinforce we will but both bold ultimately are financially. we our disappointed

In with missed interest a Crane. the for you architect Chinese-American recently closing, of renowned looking Have about your worrying Pei, the Ieoh day. you stop for start will Thank Ming and deceased I leave words new in opportunities great ones.

Operator

thank gentlemen, conference. you concludes and participation. Ladies today’s This

You lines time may a wonderful day. have at and your disconnect this

Crane NXT (CXT) 23 Jul 192019 Q2 Earnings call transcript