The following is a summary of the Crane NXT, Co. (CXT) Q2 2024 Earnings Call Transcript:

Financial Performance:

• Crane NXT reported Q2 sales of $371 million, up 5% year-over-year primarily due to the OpSec acquisition.

• Adjusted segment operating margin was 27%, reflecting dilution from the OpSec acquisition and an unfavorable product mix year-over-year.

• Adjusted free cash flow affected by higher CapEx related to US banknote redesign programs.

• Adjusted EPS at $1.06 aligns with full year guidance, with adjusted EPS expectations narrowed to $4.20 to $4.35.

• Net debt-to-EBITDA ratio approximately 1.8 times, leveraging well for future acquisitions.

Business Progress:

• Successful integration of OpSec into Crane NXT's operations, enhancing their market leadership in online and physical authentication technologies.

• Crane Currency achieved record high backlog, leading to an increase in full-year core sales growth forecast for currency to 3%-5%.

• Expanding share with existing customers, including issuing 11 new denominations adopting micro-optics technology.

• Continued strong performance in gaming verticals, with inventories normalizing and new orders from OEM customers expected to continue.

• Introduction of new leadership in CPI segment to drive growth and innovation.

Opportunities:

• Strong backlog in currency segments provides high visibility and confidence in currency core sales growth projections, influenced by positive customer responses and new multi-year orders.

• Robust M&A pipeline set to diversify and expand Crane NXT's product offerings and market reach, taking advantage of a large $3 billion TAM in the security and authentication space.

• Significant opportunities for margin expansion at OpSec by applying Crane's business system efficiencies in supply chain and manufacturing processes.

Risks:

• Provides no explicit risks detected.

More details: Crane NXT IR

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