CR - Earnings call transcript Q4 2021

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Operator

Greetings, and welcome to Crane Co. Fourth Quarter 2021 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] As a reminder, this conference is being recorded. to Vice conference President, like host, to now Feldman, Jason Investor would turn over the your I Relations. Please go ahead.

Jason Feldman

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

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

City. We event person me contact Please York if expect directly this would New host details. to in you like in

Max. the to call turn me over let Now

Max Mitchell

with difficulties. teams rapid supply we Crane uncertainty, operating challenges, to phenomenal inflation drove want you, globally but Thank results. yet was which our another chain among results year through that by extremely Jason. XXXX drove across thanking other year these start environment, an COVID-related another one in with difficult I

row value results. as XXX% still challenges full challenges, and management all stakeholders. a all We XXXX. have our protecting second our income. million, increased financially and customers of work adjusted drove associates, sacrifices efforts through flow record And to team both and impressive adjusted teams while of as for XX.X% personal numerous along Record year of to possible. XXXX in and the margin to where had physically cash our was with was well protect free worked $X.XX our these $XXX creating of of operating compared which Despite net EPS Record our combined XX% the

compared For the $X.XX in $X.XX fourth last fourth was specifically, quarter the to quarter EPS adjusted year. of the

different me Let few ways. performance perspective, put our into a

That $X.XX First, earnings our original $X. XXXX contribution was midpoint of guidance included Engineered Materials. guidance from

guidance better in a $X comparable we on basis. original our approximately So delivered than EPS

than prior Second, pre-COVID our in better results XXXX XXXX. prior XXXX results Again, were XXXX. better peak pre-COVID in than peak in

very demand $X.XX Materials XXXX periods, approximately markets $XXX of million many even remain both in $X.XX than a sales strong below business. has that still defense been the the path EPS almost drivers This business. pre-COVID Engineered of amount our benefit This driven a our from to levels, operating XXXX leverage business favorable Payment the million acquisition, over long-term $X macro business strength stages half and on long-term in are after secular profit top that about two Crane business, Merchandising Cummins realized portion accelerating, global has levels. given adjusting our constraints the in continues recent or was and Aerospace of & next still to the & levels commercial peak, XX% pre-COVID valve Remember, Payment was both Technologies, higher last $XX in strong in profile in At sales Electronics business adjusted growth of than of to three was end drivers. the with Allison cyclical business growth million Payment for process acquisition-adjusted Excluding in $XXX were total from the also to EPS XXXX high-margin And by while our wage of recovery. below high though about the Technologies, more Process below labor year, XXXX prior levels. with and still early inflation. Solutions be Flow similar Innovations That's years of

growth pre-COVID line, while combination cyclical bottom by our already on with productivity, strong the results So performance recovery to from a continuing with invest better accelerating across come, of than still a execution along business. driven our to initiatives,

our we enumerate this margin record the we being levels ES&A. helped the the our record growth commercial cut reduction despite XX% any is not since as our have that in execute And them environment, is and segmentation by ability earnings business, powerful pursue, investments performance, the enormous with reflects growth challenging you and I EPS inflation, with period XXXX very from come this midpoint, fundamental reaching can COVID-related see focus of to growth customer in in by which adjusted sales core our to certainly XXXX but have strong not business proposition the extremely But won't but our improvements productivity, about driven X% numerous during achieve difficult currency EPS to X%. $X to lower consistency and four business business and partly results, grow initial and improvements articulating execution, that now. growth in demand performance message of the and right also at year, across financial significant record to key our on $X.XX, acquisition, the proven accordingly. have EPS intentional third, quality Building achieved this performance huge of gross critically the our solid even waste challenges. also in Our did again of we guidance years more last what made quality, value clearly we a pricing shift a

in we have challenges. guidance extremely to XXXX heightened consistently issued but And being transparent This so. with to have have of uncertainty, when and shared years, has changes two guidance developments execute even giving is a few our guidance grow still environment demonstrated updates and to We last willing and unexpected we granular period ability were the the do as been others evolved. over our in

guidance the assume operating not material in environment. Our does change any

Just sporadic chain of challenges It's this year, we higher a to of chain. but same continuation demand waves, constraints, in We constrained sales range the guidance is that of early of be the infection have supply the could that the believe underlying and by inflation. businesses support a variants, related COVID of today. sight very most supply our across level line will

further our differentiated and of record to solid of full see underlying execution price, issued XXXX execute to investors in newly of in the businesses. in you strength outlook expansion continue near stock starting and further performance much excellent as on strategy. Our our can our you multiple as our while our see notice, we upside some provides And we all evidence are

again the our that new me maps, been consistently reiterate are products communicating many let innovating, on last customers. technology So developing our provide message product have new road long-term for the we and and we for value to executing years, solutions

savings. system commercial businesses, We operate growth on of across Crane and cost to discipline business growth, excellence, drive our consistent and initiatives cadence we are executing productivity numerous a also and the on with focused

throughout XXX% delivering balance the those strategic free ability of growth We investments initiatives entirety and have pandemic. margins the in well, objectives while an our cash extremely demonstrated of to maintaining on flow

flow. continue cash and we growth consistent to of expectations, excited organic delivering substantial and We more the Credibly Crane execution. at execution, on for our I’ve Over and have was after and above-market investments driving excellent view. growth. consistently recovery point driven we leverage market very an evidence drive this you that free seen time, in growth and growth discussed with inflection prospects operating years will Paired are supporting our about solid have how accelerating more

our We continue thesis. to will execute on investor

recover. are markets as well-positioned organic end for to growth our We accelerating continue

consistent We in are ongoing of investment our commercial and because end outgrowing our product development new excellence. markets technology, and

generation, for acquisitions provides Solid substantial portfolio execution and to deployment continues dividends. earnings into repurchases capital growth that cash which to free flexibility shaping from and and leverage strong

commentary. and repurchase some announced by that our turn rate over as yesterday’s we value announcement X% inflection, continue as and initiatives, to momentum and through sustainable to as for generate will with for create share commitment stellar Management authorization quarter, of philanthropy, at to this clear confidence this and and ethics, we $XXX the additional last it evidence all increasing Business point, financial equality. I’ll Board’s from Rich with the System At acquisitions instrumentation the holistic in And Crane Crane million cadence performance sampling. foundation the the well Continued in Currency, value and supported sustainability well all disciplined growth stakeholders. by Allison Cummins we our the Rich? thesis dividend have reflected increasing of traction our substantial and as we of we is are

Rich Maue

good and everyone. morning, Max, you, Thank

to As items, segment usual, XXXX presentation. will comments that in providing XXXX, of slide I’ll be excluding release quarter the and press special as our compare outlined fourth

I’m reiterate of has year, have at seen the this outstanding delivered Their performance particular amazing the I just over watch organization Before time been associates. like I begin, we the evident I last performance in to comments, with effort so many proud last in from part committed without years our efforts the are Max’s be incredibly two clearly would dedicated teams and question, to Crane. in to and best my

quarter OE slightly up back of reflecting quarter Aerospace expect recovery timing. XX% increased to decline OE and XX%, to than increased Total last on increased sales year timing showed quarter last aftermarket sales January XX%, we key to in at we the was both a basis that XX.X% way in even a declined increased next well are driven of recovery million. a end OE based but shipment full defense primarily I points. our be expected XX% had markets. year basis, fourth relatively on So faster though and business XXXX. margins with sales XXX that decline sequentially, military quarter. tell the aftermarket. the a that to down with commercial teens to than we start, aerospace This we mix. mid-teens year, XX% margins the commercial in & expecting On Margins and high aftermarket Segment our XXXX were to Electronics, compared Commercial to by in increased the in last we sales in you did sequential $XXX aftermarket better comparisons increase commercial by Full quarter tough guided first XX% shipment of year.

into We XXXX. head growth we expect accelerating as

On years the double-digit the three as following defense of declined consecutive of range business, side growth. high-single sales digit the expected in

in with of course the numerous the May’s However, as well-positioned we Aerospace this discussed we few up at next large event, Investor over are ramping Day last market extremely programs years.

we program where largest the Importantly, most programs, I’m modernization no ground based of new for content pleased during the last generation particularly to systems us, on are these extremely were in military systems. awarded and quarter, that entirely upgrade also history. this for had business’ radar single the morning of announce new we prior

that of fleet to that long-term the upgrade is of Delivery upgrade technology. in business, entire sales XXXX, foreign You have potential in with control the the on growth countries consistent the brake aircraft years had also delivered controls fleet. a F-XX. on may F-XXs, accelerating number we fleets years continued in service. starts the numerous after a other this the Force’s U.S. and largest similar on from expect few incremental U.S. potential program recall ago, we sizable B-XX we Air the military platform U.S. This of of years Across which systems substantial in program this new creates that, large brake resulting for based the program A a the for is of the to investment fleet on several C-XXXs. award

levels approximately Specifically back X% late time margins XX% for recovery XXXX with the about in frame. we business or pre-COVID growth a this in XXXX, expect of full with early XXXX sales to

above slightly and future projects And is emerging shifting where North have business margins driven Flow for overall favorable our America, continued order project In is normal of In to Sales in from primarily recovered XX% to XX.X%, in Process to we levels. record Technologies higher XX% being XXXX seasonality XX% led compared new pharmaceutical core already driven third into driven process the of year increased profit despite we power core up $XXX volumes. with XXXX high. basis, core a in and foreign projects have otherwise for industrial MRO the million points by markets XXX Europe, activity order Moving chemical and early flat general with backlog up and by was Flow led to uptick last basis would refining see seen operating Process $XX Technologies. up All now still to XXXX XX% million seeing are sales our rates decline heavily we end by The X% of operating and projects to stable, but Sequentially quarter, backlog X% great soft. increased signs is compared by an a exchange. in XX%, funnel a suggest China, of leading a year-over-year by indicators core seeing strength of chemical chemical, year-over-year at good with growth the sites. and quarter. activity suggesting is debottlenecking activity. are that early On greenfield the up focus and will some that orders the we increase market. were activity planning strong

side technology adoption unique seeing ball launched FK-TrieX business, early building do strong commercialization calls. XX% before. service new to seated we business conditions residential Razor for further in is the we of our continue From with modest range. and with expect perspective, tough stable metal with and seeing our pump truly amazing solid a a had process are high At domestic our including For about our with grinder expensive we We seat and which pump the water where XXXX the minimizes talked our initiative core UK have in XXXX we products quick see success an business, pumps valve, sales in a the growth water decline in cutting market, with Commercial that in businesses. and demand services Canada,

we with great We and last our that are also launched NV new doing well efficiency platform with interest momentum. July high order motor

We quarter. Investor more others and this will discuss Day event our detail later these at growth in opportunities

but to and process approximately exchange core margins potential higher For year business chain full for year X% led Full believe we approximately X% a a our growth be We growth expect increase XXXX, the constraint. supply foreign is to likely supports XX.X%. headwind. by demand should the

focus more Our prior for our was when were margin record in than year. the from million margin reflects several years approximately product positive XX% consistent and this on This of next our our benefits XXXX, $XX driving higher and for importantly, segment commercialization. guidance new sales development productivity

growth, year products profiles. The to the value prior XX% in year during of with segment our does margins command have sales than of drive development quarter XX.X% in XX.X% increasing Crane very incredible, this segment XXX basis more Merchandising that the product at progress top new Our line $XXX record & sales year million record Technologies, margin Currency. Payment points. compared just and of compelling the new been has At full business propositions attractive increased margins

more the shortages Payment see We Crane Innovations return investment, continue inflation. medium-term greatest in to trends checkout’s self in and wage expect even of growth on we strong driven retail by labor period and valuable at a strong today

convenience formats, are we as customers, of categories as solutions. such traditional stores alternative seeing Paypod stores PayTower the interest growing well discount retail as and to in addition and In our strength from

XXXX. on For to year, markets, of have Japanese for are these solutions, products substantial the three originally we European the four in last particularly to we but in convenience store and traction with times gained focused sales track our increase over market, America, these we North believe on we and the

we a formal stellar the in order year, remain currency At U.S. Crane products for now and connectivity received now elevated recently no strength at payment Federal traction message Currency, to vending, transportation. and Cummins across a to service-based now. the the and we recovery similar And the to from financial yearly counting few with the where to quarter, coming currency expect quarters along XXXX. suite with see cashless volumes we validation addition a continue and consistent for Reserve, XXXX surprises, remains we a In at have with solutions. Allison, retail, conveyed off Demand gain gaming, full services continued solutions we we higher-speed option, compliant have in to of

of government addition next new to notes be working business, secure over core In rolled out position that several the series strong that our U.S. years. to bank on the continue we will

number the international compared we micro-optic typical average. our new revenue business, specifying to denominations win seven the security technology our reprints in more than to our new it of continue a side, for XXXX solutions denomination, On with is in twice When typically recurring drives specified from years.

great So news. this is

decline year XXXX. times. from in the international perspective, the half However, pick sales in into And as first second and will up somewhat is the you at business start of and a timing know, half XXXX again of lumpy then this to a

For we sales offset headwind X% growth, segment of XXXX, year exchange a points. core partially basis foreign approximately the by XXX overall in full expect about

very segment expect margins the also strong in XX% range. We

and XX.X% detail quarter, a company In last the exactly full results Turning the now to guidance and on in tax total on quarter. non-GAAP our our we fourth provided with more line was guidance. rate year basis, XX.X%

than tax have was expiration the certain As on items. normal, due primarily tax our limitations to of explained we XXXX of lower previously, rate the statute

we million XXXX, normalized income. tax was for strong at a the record which revert approximately to continuing a extremely operations of and expect adjusted reflects flow XX%. rate Free full of net For conversion XXX% from to $XXX cash year

generation, is to balance solid stronger than our addition free cash In sheet ever.

just year, the outstanding. of debt As of short-term $XXX net debt had million. of $XXX on cash no with the is long-term hand $XXX we of end Total million million and debt

announced that $XXX million. Materials to clearance had regulatory is a we ongoing. an signed for agreement reminder, The process As XX, Engineered May segment on we our sell

transaction close to $XXX to sometime be program. net million, have yet and we requests sheet a we in expect in million Department the for balance $XXX information March. from our metrics not to mentioned. is response approximately quarter, Last I the reflected Justice, repurchase an tax just proceeds the which approval expect When announced completed closes, we We of of share authorization

that also of to actionable, this is activity sheet ample believe financial return two cash We properly balance objectives, we balances maintaining flexibility while of program continue and M&A shareholders. preserving attractive believe an for the providing efficiency to volume

quarter, $XXX both and believe our discount authorization. advantageous our $XXX medium- our to on this very approximately million peers acquisition that given During high time, our synergized and the repurchases share million remaining repurchases, We multiples. under at with fourth paired we in are outlook, spent trading just confidence long-term under current leaving fully

yesterday the Board’s dividend our also our in outlook. X% and confidence quarterly and reflecting We a increase management to announced medium long-term

recent sale, Materials together, the history, Taken our and and including capital that Engineered events this strategic dividend evaluate increase in drive shareholder continue we all largest portfolio options to the authorization deployment returns. to repurchase demonstrate

Moving to midpoint. guidance Max outlook overall to $X.XX, XX% mentioned, is the as at for reflecting adjusted EPS earnings growth the our $X XXXX,

X%, have basis partially We an details $XX rate but X% non-operating of foreign sales additional declining by in expenses expected headwind with assumes the Corporate XX expenses exchange. a a million, of and offset provided core guidance more range, tax slightly XX% from million to $XX presentation decline million. will normal slide this to growth a XXX point count to of share

For presentation, approximately free conversion. is XXX% guidance, in can Slide we XXXX to cash slide XXXX flow to XX due primarily that you million items. lower our than have $XXX free averaged timing-related of range cash a flow, through our million, our modestly XXXX, see guidance from actuals, $XXX On

and year. sales hockey no EPS but for in outlook the Regarding the particularly for sales, first stick cadence the gradually that and quarter and There lower and the a the expected be accelerate course really second year Overall, will strong quarters of and half, follow, beyond. is aerospace earnings, the will of throughout XXXX incredible than EPS, for XXXX electronics. modestly for a margins very

take another poised Day Investor look Operator, to detail success, are year our question. of we discussing March at forward our for first to are and more ready We yet story in we XX event. now our

Operator

time, [Operator Karas Damian be is a Instructions] first Our At you. go question ahead. Thank from session. will this conducting with Please question-and-answer UBS. we

Max Mitchell

Damian. morning, Good

Damian Karas

on Congrats everyone. the morning, quarter. Good Hey.

Max Mitchell

you. Thank

Damian Karas

X% a So if I I little comments about EPS growth outlook. the about disconnected guidance from the buyback, kind positive you wanted of adjust to demand just for your the seems up you get ask here.

risks? that have I rates maybe think you and chain backlog $X.XX the you’re constraints just expansion range, well. $X about suspect to on the order there? outperform on you quantified any the any you And to where just maybe factoring you’re seeing, supply chance in the that a extent talk to you’d can areas other elaborate as Could key

Rich Maue

guide just way and at rate out the Sure. would also from to the you point the higher. our lower going shares I the would be buyback. Well, your that I question to this, the look mentioned EPS is components, being tax on notably

substantially offset one So another. they

growth. business You unit then the increase corporate together have performance costs, look with core lower a we the at X% essentially in earnings

way at we’re it. that’s the So looking

it. an As flow, performance XXXX, free I across just initiatives, outstanding Damian, – board, the exceptional growth we margins, cash name had in you

So, about good of point doubt. feel XXXX a a we really without demand view do and XXXX from

as you on call be So, it demand. our for relates clearly the we reflected remarks, is takeaway to regard as here our that commentary, a in in should prepared

reason so otherwise than chain. might guide entirely not you expect higher the why to the is would be due Now, supply the

sitting of If So, to view. things couple it’s path of a points we see here frankly, a as we’re think today. do improve, growth, could we another balanced

Max Mitchell

many talking with are what they’re why others the that this supply And it I challenges. missing not would call that chain, about hearing Damian, or are you’re out terms Crane. again the in of from

and doing We’re an managing with challenges, the incredible job. we’re

an control, doing uncertainty. within What’s amount are incredible job. teams significant a Our there’s our of

at – this. not Fed manage timeframe a just we’ve no through newspaper mean We for know understand We is I adjustments, the is that it. mean all we I we from But that for see think sure. rate challenges, term six on is the rates, much it. can the think there logistics port happens, We what every From I – with well are balance certainly everything the near front done and Crane in demand inflation congestion, that being – and there’s what day. volatility today, month constrained, changing is the dealing read moves, I supply news here.

on putting team guide our decisions we’re while on based communicating not customers, we’ve being on burden really our environment. We’re intentional given a this the And make. that associates facilities, I think solid undue good, we well with really

model believe and assumptions. as control to environment the If have down it opportunity Rich our your is better. you said, make I And we it can what’s improve. comes going you to to mean, outside your related to really assumptions. economic do the But of

Damian Karas

of elaborate in maybe opportunity just able where some some on in think the And just the could last Expo currency was there? of week. gaining those at Understood. I see wondering comments for Paypod spell that I traction? various you’re you out on U.S. further what pieces if U.S., and NRF laid about the products expecting and your I kind for then markets this end out Rich, CPI was year. could to thinking Paypod Maybe the you regarding seeing outlook, market you growth I the And for guess business your you’re

Max Mitchell

Yes.

growth differential the on first So rates.

as said we in the in government, half, U.S. be things flat. currency expect about up. and least we for at currency, down the his then first International So picking Richard to see prepared remarks,

the leaders, probably be teens solid range. want low that Rich, growth the and services as of elaborate so vending do of gaming implies you pretty broad-based, two the but Paypod? on – are in it’s I should right? mean growing well. kind to really it’s retail certainly that the good on and out And And CPI financial

Rich Maue

see – intention an I we look, could the said started convenience be that success excellent in that the on mean in our to Yes, think we’re an capitalize we now for like opportunity Paypod, given the prepared jurisdictions – U.S. see that stores. our opportunity look, different out geographies in in the to with on just I the I we smaller It’s other here. remarks format

that’s opportunity us to I funnel little a have we early, the call it’s – we excellent for I think, in say like we enough continue a here while to today. see, ourselves would on have into different bit mentioned So, do push retail to feel substantial an this formats.

Damian Karas

Great. Appreciate the Best guys. luck. color of

Operator

Kristine next with Please Liwag Stanley. go ahead. The Thank you. question from is Morgan

Max Mitchell

back. welcome Kristine,

Kristine Liwag

Yes, thanks.

I color you’ve on that issues? multipart I else. here. you’ve you’ve supply your manage better on more the the have highlighted chain question up Following labor chain actions you done a supply provide question, mean, taken Can than and everybody to

do can makes as you and if longer, chain higher you have? anticipate manage materials that then And different? your what So, as supply well inflation you also, raw labor stay for the

Max Mitchell

sources which allowed we be us alternative supply, to such to it today. nothing to and think doing – getting the others the whether moves everyone the the reality of and two it having could isn’t making years, diverse but years have the improve it ugly substitution, is we’re businesses, anticipating do and understanding finding not inventory I throughout to to was forecast, that – What than – better it from and last situation two from do and the everything, else of trying understanding true to facts

in balance general assuming we’ve think against finding actions the surprised. That’s of I improvement getting comment and supply and that some out and the our started taken. we’re and general earlier it versus forecast we expectations chain

side? inflation the On

Rich Maue

we on operate mind in and this – supply reiterate exist just side. that inflation the continue today, way to yes, not see And would everything Max will. through can the we We the we chain I we of we’re believe with in we the centered for said, chime think I And this that are. can, to planning that still a mean, I’ll I up. constraints balance and just ease challenge continuing the your think year. around Look, question I was being

with when to think see cadence this pass last stick I all the that XX is going we to we months have place in started come the here. over put to us

labor, globe it’s an are I whether excellent tight think these set jurisdiction to very whether it supply that forth. all is we’ve chain, different of variables what that across so seeing, we’re and the got teams

feel through about good to tackle XXXX this being So, least continue to at we able – XXXX. through

Kristine Liwag

Great. And what’s of $X baked your the $X.XX? XXXX guide? in to Is that is range conservatism to how driving much

Rich Maue

supply chain. of based the things To ease feel which I we we opportunity. expect, would that is up, upside we – like sides is both the have that say extent that range really effectively

remark of to As of we mentioned in – a see prepared points eases and my response I in couple up. that potential the my first the – to that, extent question, within growth

Max Mitchell

conservative. again, on range. today, call see would mean, I hesitate it and we we that based know feel confident to in what I

XXXX. the Our assumptions for current environment continues all of are

all again, want So in economy which through hopeful same on I own convey the chain, demand given that improve, XXXX. things of all this solid continue to traffic, we’re the supply of the views helps. recovery, hope at based your know that side, we level that is feel the if we I range, on air news things both for,

Kristine Liwag

Max. really When you XX%, trending I your margin segment your guide could a helps that target, That’s one. XXs. which helpful, squeeze look I revenue, your above about Yes, this at and historical of XXXX margins And incremental is last in the is one if mean lot. this

running XX-ish anymore range rolling you products Is with looking should business XXXX, looking but cost your we also I and think the going XX% in? your I’m and the more the having so reduction beyond is that of how rate have about business I’m And engineered is after materials new sorry this all guide, if mean, run today? forward? ahead beyond not these how

Rich Maue

rate. yes, Kristine, that. we've I change step absolutely of a made We with respect to say like would a our feel leverage bit

that's absolutely this. You of products mentioned component a new

it call see just margins frankly, at the our look inflationary last, in we four you even momentum XXXX upward continued years gross environment. this and in guide, If over our

driven and obviously of the able those So to it's that's the products. by price, but being offset that's a new new development really product initiatives with combination value

is would expect to we XX% So that see. something

in XXXX, the highest still XXXX beyond businesses is would other in Crane have and to substantial thing point to look you you're the margin I two If recovery go.

So A&E then portion to a the the very commercial on aerospace, side aerospace of and Crane Innovations still business, the has long way Payment payment of go.

would maybe some into leverage excitement, around will So XXXX, rates that XXXX drive even the bleeding margins. on there's I say, those

Kristine Liwag

the for guys. much very you Thank color Great.

Rich Maue

You’re welcome.

Operator

Please next the ahead. Davidson. D.A. of The Matt you. with line Thank is from Summerville go question

Matt Summerville

business. questions, good couple back Thanks, morning. A of the to getting payment

the through actual truck sort you end the several mind weeks the low back. better of to the planning XX% the high-end, and constraints low you're can planning here? But up being flexes your And a even of for provided a or key the versus What high realize more. What lack print range, maybe it's order we’re flattish. For end? ultimately I the in some production for, drive word, end at high are of it

help forward? understand see rolling how So me that you

Max Mitchell

give just I'd was data nod of nod retail cash insight as to on some thought the Matt, I your analytics, depth both And research, a well as exceptional, a analysis, so of your to research. – read absolutely the segment. First,

struggling with best doing factors COVID, can. other they're manufacturer. the a there's they On of our paper weigh dealing other as of those so challenges, issues challenged also supply the all with They're we without is into They're a outside is went USG that with also X.X COVID, been in. and that chain and BEP order, around cycle so average, through going going entire billion notes, clearly be the specific demand. probably which to The

it we're to working addition series, progress us together of as cycle make continue samples. with which as exciting to the takes does on, In press, we just to time-off the run new all

satisfy demand. you're under to trying a you're as you're new series, move So current to pressure also trying to

believe I be BEP Fed tapping billion Once the love that notes. as supply it's doing billion but in job, The at is to constraint X.X phenomenal billion we think we see – the X.X and is it out in to flat. constrained. that's range a again, X would chain going the it is why to

it's And X.XXX X.X now to where range so billion. the billion billion, was last year, you widened X.X saw it

the reality of the widened situation. because of they’ve the range So

that's going continue think from the demand level to years many out for viewpoint, loaded flattened in into that's investor's being take many, future. the an I confidence

think I it. how that's So of

Matt Summerville

Got it. on about – you And work we've then thank done a acknowledgment, just as and Max. business retail a you as follow-up, and around the But lot and know, payment of talk the side. to I want the for

be Thank for to bit we be about of in a things pivot a ultimately your One more Crane? of what of little now cashless we're in seeing should that context you. What of business? appears self-checkout, the does How that self-checkout. deployments mean towards that the thinking trend retail

Max Mitchell

not but only some point, their seeing saying have And solution. entirely that of both cashless various it of any nontraditional cash types So certain cashless using is through at been in been So not settings It's no also areas I'd of really traditional all. existing also what historically that that retailers There our new the and and right? markets, new say Where of form a type not applications the kind are served is explosive or specific while, a outlet, specific some Paypod, new in automation the want cannibalization homegrown cash-only, depending of both a exclusively, new that business. I'd PayTowers, aware format if that exclusively, certain across cashless they we're the of retail that or structure, growth we're are there's automation areas, developing that make on cash. only on the store areas formats own that is almost been there's is that in different needs new different formats, historically well about Matt, right? a the for format And whatnot, have self-checkout, talked as and as sense. there's formats first of those depending makes we've

Rich Maue

point to pool I'd at here, is entire actually the the think the some even expanding, maybe report. growth in in of Matt, to right? the your thing are growth and we're cash in some overall you other is in on you look The notwithstanding areas expecting when self-checkout that new, that I side, Jason's in of cashless areas see, cover on overall pool that the chime

to forward. having us So bigger just we that see look as for opportunity great continue show pool the opportunities by we just

Max Mitchell

well. And as are on we a – cashless reminder, we side are participating the and

format, in benefiting, that solutions Right? two space. realm which that in have The excellent cashless is an as one well. so that of just that we're gaming announced, gaming absolutely conversion We that's a player

Matt Summerville

Perfect. Thank guys. you

Max Mitchell

Thank Thanks you. Matt.

Operator

The Nathan next Stifel. with from is Jones question

Max Mitchell

Nathan. morning, Good

Nathan Jones

Good morning everyone.

Rich Maue

morning. Good

Nathan Jones

free a few guess questions yield I'm stops it running or about going I is X%. at of business flow about at the cash asbestos, running a a to ask free cash yield flow

policy If you a which know of good lot a you I companies. about X.X%, things. guys had probably these find can as of the as is asbestos industrial have for defending you out it's take expenses, about

are two-thirds valuable you was it I and defense expenses settlement. sheet balance that and on them. to cycle to about not that the sheet? having some claims the of more those one-third on And point, Can What that capital? use you of view be about And balance in at talk with likely are given Engineered defend Crane's settle think to where good you have net to a thought as for getting forma essentially off pro no the do Materials the actually business? debt you

Max Mitchell

that interesting. there but There's front. we're and no has That's are market would there, an It's investigating investigating at, out competitive. some some changed. on I excellent question, actively something market we've very studied actively are for time. has gotten quite that evolved that that say looked the no we certainly The certainty guarantee, that vehicles

costs We a but terms strategy In over has strategy. strategy, of with changed and our it more the unfavorable shifted defense of we’ve the to rulings, were the years. settlement defending hard, reduce

add? having have outlay. that's a else we're a that think guys doing job understood repeatable But an you a I consistent so anything question. there And And you'd good outstanding and and

Rich Maue

right? number bit. the to five decision changed No, the defense three is over has And changed aggregate. little in last pretty thing, our down historical Nathan, is Today, when two I the only mentioned XX% believe substantially things times costs times So Dummitt the years. you it a a approximately settlement that after come other the ratio that cost, that was are

Max Mitchell

Continues to reduce.

Nathan Jones

probably cash kind I million, mean risk-free for imply rid $XXX a ITT I of a And which guys. $XXX the looked it. spending Got XX% liability, $XX million cash-on-cash would story. simplifies at of million of asbestos getting it's you're that you it would ROI, cost their if year,

seem for deployment. cash like a avenue reasonable would it So

The was rates mean, business the we great business. valves? said for talk the you of other Process Flow wanted are process Canada growth just I the differences on about a the year one in recovery business. – the and to where you and the in process last valve commercial Can ask I the year I obviously, between had think side

Rich Maue

Yes.

the but mention just commercial did last also So a we a year. year last year, Canada, portion absolutely strong other had really fantastic had year

side the growth growing orders process – were to business, On year of the the started inflect. and orders core the throughout

for valves where see in early look still year, but to as MRO, areas project will up, North that areas little into particular, next And growing see we business, So commercial I sure. mentioned waning commercial on nice around the we forward bit, that continue but some a signs call, we China, debottlenecking and America, not pick the activity. things being Europe, just the

level, say be next process still high good a back XXXX. it It's to commercial growth at year going year, So in it’s, year see was I muted pick Nathan, up. would the to start and rates, a but we'll phenomenal

Nathan Jones

like start quite of the seem a simplification, Process those revenue they divestiture segment, of of looking to I to simplify thinking Engineered be be Are of portfolio, of We business that. might some see the bad levels there's might and time disposing in opportunities businesses Some commercial Materials of some post the portfolio at not further strategy particularly not peak those? business? the Flow in might the kind at maybe you fit businesses that think

Max Mitchell

we'll nothing focused we time, all – the evaluate. but look continue Nathan, now, of we front we're and continue portfolio on the what's right this other in at Well, us decisions actively to time. no – at

Nathan Jones

Okay, thanks for questions. taking my

in Looking forward you to seeing March.

Rich Maue

Yes, Nathan.

Max Mitchell

Yes.

lot Looking to in you going to to It's news great a seeing It's updates. forward A March. of day. share. great great be

So thanks, Nathan.

Operator

Thank from you. The America. with Please ahead. next Grenfell Bank Elizabeth of question is go

Max Mitchell

Elizabeth. morning, Good

Elizabeth Grenfell

morning good everyone. Hi,

Rich Maue

morning. Good

Elizabeth Grenfell

be hoping shaping? your evolution to and how M&A seeing about you And speak just in any the what you portfolio was might could environment there? to thinking you're about continuing you're I think

Max Mitchell

successful our that as that we there's about synergies, not making thinking A&E up the uncover some we're continues. being opportunities that even discipline, flow couple deals we're each segments. I to active fully can now be being as space. aggressive on though as a that particular, you continue last we we in and fairly tell ended in we've value the aggressive it well right Well, of in the our very maintaining flow In space been that of on year sure

a a side, There's that aggressive. continue. being we we we're lot market, bring and active an it's So synergy from

I don't So I'm we'll here hopeful present opportunities know have themselves that if that you... some XXXX. in

Rich Maue

did hearing mean, process it about had – Yes. looking multiples out hope and had the our I the on during growth. on – frankly, what see at felt That like the the similar the long-term you're how were think a these size I discipline, in year and the the A&E We deals from and medium in that announcement our of situations but well, I just reflects it in there just given share feel repurchase. and I cost the we in echo. we as as we and quarter perspective. fourth would multiple we – PFT call,

Max Mitchell

of best out values One stock. Crane's there, the

Rich Maue

that a – it of made our multiples lot this us the of deals didn't of math taking were sense relative the and these That, was we to cost work own simply was But us. for to some in seeing the into particular it math. context

Elizabeth Grenfell

Alright, thank very you much.

Max Mitchell

Thanks, Elizabeth.

Rich Maue

you. Thank

Operator

And the session. we I remarks. to gentlemen, and Thank Mitchell reached the turn have call to like the end back you. Ladies of closing would question-and-answer for Max

Max Mitchell

environment, our our growth. our the of Thank Crane. an of profitable for with to global macro Crane And credibly incredible on you and you deliver that for was in of our environment all in continue and challenges. in your driving and you suppliers, today, performance to XXXX thank uncertainty our stakeholder teams, interest communities. the continued a performance, for call customers, leadership, consistent will even thank And year uncertainty joining

by hope it. add driver Day matters, We things, are which critical the little As remains join our excellence, results. big Colin going to strong all great develop able honed of and our late sharper on over XXth, Excellence exception. centered not our things the you're prevailing upcoming to Powell consistently little event. a in to time attitude." "If an Don't on in at March a habit you're the and It big is excellence miss Crane up attitude many said, you Investor focusing is achieve further matters.

lot not over We all started. Have great and are journey just an it is all. have of we Thank you has been a us a incredible to share. yet, It getting for day.

Operator

This today's conference. concludes you. Thank

time. lines your at you Thank disconnect may this participation. You for your

Crane NXT (CXT) 25 Jan 222021 Q4 Earnings call transcript