Crane NXT, Co. Announces Strong Fourth Quarter and Full Year 2023 Results, Raises Annual Dividend by 14%

Delivered Full Year GAAP EPS of $3.28, Adjusted EPS of $4.16, Exceeding 2023 Guidance

Achieved Full Year 2023 Core Sales Growth of 4% with Crane Currency Core Sales Growth of 8%

Crane NXT, Co. (NYSE: CXT) ("Crane NXT" or the "Company"), a premier industrial technology company, today announced its financial results for the fourth quarter and full year ended December 31, 2023.

Fourth Quarter 2023 and Recent Highlights

• Core sales grew 4.1% year-over-year.
• GAAP operating profit margin was 20.3% and Adjusted operating profit margin was 23.4%.
• GAAP earnings per diluted share (EPS) was $0.86, and Adjusted EPS was $0.99.
• The Company repaid $70 million of its $350 million term loan facility.
• The Company declared a first quarter 2024 dividend of $0.16 per share, an increase of 14% over the prior year.

Full Year 2023 Highlights

• Core sales grew 4.3% year-over-year.
• GAAP operating profit margin was 20.6% and Adjusted operating profit margin was 24.8%.
• GAAP earnings per diluted share (EPS) was $3.28, and Adjusted EPS was $4.16.
• The Company repaid $245.0 million of its $350 million term loan facility, reducing net leverage to 1.1x.
• Adjusted free cash flow conversion was 111%.

Full year 2024 Guidance

• Introducing 2024 guidance with Adjusted EPS of $4.10 to $4.35. Please see the "Full Year 2024 Guidance" section in this press release for more details.

Aaron W. Saak, Crane NXT's President, and Chief Executive Officer stated: "We delivered a strong close to 2023, underpinned by outstanding operational performance from both our businesses. We achieved adjusted EPS of $4.16, exceeding the high end of our guidance, as well as generating 4% growth in core sales, and expanding our adjusted segment operating margins by 30 basis points year over year."

Mr. Saak continued: "With this solid foundation in place, we are well-positioned to execute on our strategy, both organically and through acquisitions. We have a strong and flexible balance sheet, ample liquidity, and a robust pipeline of opportunities for disciplined M&A. As we look to 2024 and beyond, we have a clear path to build on our success, expand the business, and drive long-term, sustainable shareholder value."

Summary of Fourth Quarter 2023 Results

Fourth Quarter 2023 Results

Fourth quarter 2023 sales were $356.9 million, an increase of $18.7 million, or 5.5%, compared with the fourth quarter of 2022. The sales increase was comprised of core sales growth of $14.0 million, or 4.1%, and favorable foreign exchange of $4.7 million, or 1.4%.

Fourth quarter 2023 operating profit was $72.4 million, compared with $73.0 million in the fourth quarter of 2022. Operating profit margin was 20.3%, compared with 21.6% last year, with the decline driven primarily by higher transaction costs related to the Separation and unfavorable product mix, partially offset by favorable pricing, productivity gains, and cost saving actions. Adjusted operating profit margin of 23.4% decreased 260 basis points, compared with 26.0% in the prior year. (Please see the Non-GAAP Financial Measures tables in this release for a detailed reconciliation of reported results to adjusted measures).

Fourth quarter 2023 GAAP EPS was $0.86, and Adjusted EPS was $0.99. (Please see the Non-GAAP Financial Measures tables in this release for a detailed reconciliation of reported results to adjusted measures).

Fourth Quarter 2023 Segment Results

All comparisons detailed in this section refer to operating results for the fourth quarter 2023 versus the fourth quarter 2022.

Crane Payment Innovations

Sales of $215.1 million decreased $16.0 million, or 6.9%, compared with the fourth quarter of 2022, driven by a 7.3% decline in core sales as favorable pricing was more than offset by lower volumes as customers adjusted inventory levels to reflect reduced lead times. This decline in core sales was partially offset by favorable foreign exchange. Operating profit margin of 26.3% decreased 30 basis points, compared with 26.6% last year, primarily reflecting lower volumes and unfavorable product mix, partially offset by favorable pricing, cost saving actions and productivity gains. Adjusted operating profit margin was 29.0% compared with 31.6% in the prior year.

Crane Currency

Sales of $141.8 million increased $34.7 million, or 32.4%, compared with the fourth quarter of 2022, driven by 29.0% core sales growth related to higher international sales, and favorable foreign exchange. Operating profit margin of 22.0% increased 300 basis points, compared with 19.0% last year, primarily reflecting higher volumes, partially offset by unfavorable product mix. Adjusted operating profit margin was 24.5% compared with 22.2% in the prior year.

Summary of Full Year 2023 Results

Full Year 2023 Results

Full year 2023 sales were $1,391.3 million, an increase of $51.4 million, or 3.8%, compared with full year 2022. The sales increase was comprised of core sales growth of $57.5 million, or 4.3%, partially offset by unfavorable foreign exchange of $6.1 million, or 0.5%.

Full year 2023 operating profit was $286.8 million, compared with $301.3 million in full year 2022. Operating profit margin was 20.6%, compared with 22.5% last year, with the decline driven primarily by higher transaction costs related to the Separation and unfavorable product mix, partially offset by favorable pricing, productivity gains, and cost saving actions. Adjusted operating profit margin of 24.8% decreased 80 basis points, compared with 25.6% in the prior year. (Please see the Non-GAAP Financial Measures tables in this release for a detailed reconciliation of reported results to adjusted measures).

Full year 2023 GAAP EPS was $3.28, and Adjusted EPS was $4.16. (Please see the Non-GAAP Financial Measures tables in this release for a detailed reconciliation of reported results to adjusted measures).

Full Year 2023 Cash Flow and Other Financial Metrics

Cash provided by operating activities was $276.3 million in 2023, compared with $306.0 million last year. Adjusted free cash flow was $265.8 million in 2023, compared with $284.7 million last year. The $18.9 million, or 7%, decrease in Adjusted free cash flow was primarily due to transaction related spend associated with the Separation as well as higher capital expenditures to support the U.S. currency redesign program and other capital projects. (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 of $227.2 million as of December 31, 2023, compared with $230.7 million as of December 31, 2022. Total debt was $644.9 million as of December 31, 2023, compared with $844.8 million as of December 31, 2022. The Company repaid $245 million of its term loan facility in 2023, with an outstanding balance of $105 million.

Full Year 2024 Guidance

The Company is introducing full year 2024 guidance as shown in the table below. Growth rates below represent growth over full year 2023.

First Quarter 2024 Dividend

Crane NXT announced its quarterly dividend of $0.16 per share, an increase of 14% over the prior year, for the first quarter of 2024. The dividend is payable on March 13, 2024 to shareholders of record as of February 29, 2024.

Conference Call

Crane NXT scheduled a conference call to discuss the fourth quarter and full year financial results, on Thursday, February 15, 2024, at 10:00 A.M. Eastern Time. The earnings call can be accessed via the investor relations section of the Company’s website or by dialing 877-407-6184 or +1-201-389-0877. An accompanying slide presentation and a replay of the live event will also be available on the Company’s website.

About Crane NXT, Co.

Crane NXT is a premier industrial technology company that provides trusted technology solutions to secure, detect, and authenticate what matters most to its customers. Crane NXT is a pioneer in advanced micro-optics technology for securing physical products, and its sophisticated electronic equipment and associated software leverages proprietary core capabilities with detection and sensing technologies. Crane NXT has approximately 4,000 employees with global operations and manufacturing facilities in the United States, the United Kingdom, Mexico, Japan, Germany, Sweden, and Malta. For more information, visit www.cranenxt.com.

On April 3, 2023, Crane NXT, Co. (formerly Crane Holdings, Co.) completed the separation of its wholly-owned subsidiary at that time, Crane Company, in a tax-free distribution of Crane Company shares to Crane NXT stockholders (the "Separation").

Historical financial measures in this release for Crane NXT are presented on a carve-out basis.

Forward-Looking Statements Disclaimer

This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements include all statements that are not historical statements of fact and those regarding the Company's intent, belief, or expectations.

Words such as “anticipate(s),” “expect(s),” “intend(s),” “believe(s),” “plan(s),” “may,” “will,” “would,” “could,” “should,” “seek(s),” and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements. These statements are based on management’s current expectations and beliefs and are subject to a number of risks and uncertainties that could lead to actual results differing materially from those projected, forecasted or expected. The Company assumes no (and disclaims any) obligation to revise or update these statements to reflect future events or circumstances. Although the Company believes that the assumptions underlying the forward-looking statements are reasonable, it can give no assurance that its expectations will be attained. The Company cautions investors not to place undue reliance on any such forward-looking statements.

Risks and uncertainties that could cause actual results to differ materially from the Company's expectations include, but are not limited to: changes in global economic conditions (including inflationary pressures) and geopolitical risks, including macroeconomic fluctuations; demand for its products, which is variable and subject to factors beyond its control; fluctuation in the prices of, or disruption in its ability to source, components and raw materials, and delays in the distribution of its products; information systems and technology networks failures, breaches in data security, theft of personally identifiable and other information, and non-compliance with its contractual or other legal obligations regarding such information; risks associated with conducting a substantial portion of its business outside the U.S.; 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, or complete dispositions; being unable to successfully develop and introduce new products, which would limit its ability to grow and maintain its competitive position; 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, 2022 and the other documents Crane NXT, Co. and its subsidiaries file from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements.

(Financial Tables Follow)