Loading...
01/10 22:53
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents mixed signals: moderate sales growth and strong backlog are positive, but declines in core sales and adjusted margins are concerning. The Q&A reveals uncertainties about tariffs and specific growth rates, which tempers optimism. The stock's market cap suggests a moderate reaction, aligning with a neutral rating.
Sales Growth Sales increased approximately 5% year-over-year, driven by OpSec and continued strong performance from International Currency.
Core Sales Core sales declined approximately 4%, reflecting the expected lower U.S. Currency sales related to the planned shutdown of key papermaking equipment.
Adjusted EPS Adjusted EPS was $0.54.
Adjusted Segment Operating Profit Margin Adjusted segment operating profit margin was approximately 19%, driven by lower volumes and unfavorable mix in U.S. Currency.
Free Cash Flow Free cash flow was impacted by planned lower volumes and timing of collections, but expected to achieve conversion between 90% and 110% for the full year.
CPI Core Sales Core sales declined by approximately 2%, driven by expected lower volumes in gaming and vending end market.
CPI Adjusted Operating Margin Adjusted operating margin decreased 190 basis points year-over-year due to lower volumes and unfavorable product mix.
SAT Sales Growth Sales in Security and Authentication Technologies were up 22% compared to the prior year, including OpSec.
SAT Adjusted Operating Margin Adjusted operating margin of approximately 7% reflects the impact of lower U.S. volumes and dilution from OpSec.
Backlog CPI ended the quarter with a backlog of $147 million and SAT had a record high backlog of approximately $370 million.
Net Leverage Net leverage was 1.7x, expected to rise to approximately 2.3x at the end of the second quarter due to new term loan for De La Rue acquisition.
Tariff Impact Estimated full year unmitigated impact of tariffs on operating profit at approximately $25 million, expected to be fully mitigated with pricing and cost reduction measures.
De La Rue Revenue Contribution Expected to contribute approximately $80 million to $90 million in revenue in 2025, with an adjusted EBITDA margin of approximately 20%.
Full Year EPS Guidance Maintaining full year EPS guidance range of $4 to $4.30.
New Product Launch: The acquisition of De La Rue Authentication Solutions complements the OpSec business and expands security and authentication technology capabilities.
Service Contracts: CPI won a new multiyear contract with a major retailer to provide on-site equipment repair services in approximately 450 U.S. locations.
Market Expansion: The combination of OpSec and De La Rue Authentication to form Crane Authentication enhances market positioning in security and authentication technologies.
Sales Growth: SAT sales growth is now expected to be between 19% and 21%, reflecting increased sales outlook due to the addition of De La Rue.
Operational Efficiency: Successfully completed upgrades to U.S. papermaking equipment, resuming full production.
Cost Mitigation Strategy: Implemented pricing actions and supply chain initiatives to mitigate the impact of tariffs, estimated at $25 million.
Strategic Shift: Focus on disciplined M&A to diversify the portfolio, with expectations for additional transactions within the next year.
Tariff Impact: The company estimates a full year unmitigated impact to operating profit at approximately $25 million, or about 4% of cost of goods, primarily due to tariffs on China, which are expected to be mitigated through pricing and cost reduction measures.
Supply Chain Challenges: The company is facing supply chain challenges due to tariffs, particularly from China, which is estimated to impact approximately $20 million of costs related to CPI components sourced from there.
Economic Uncertainty: The company revised its CPI sales guidance from a range of 0% to 2% to a range of negative 2% to flat, reflecting macroeconomic uncertainty and a pushout of demand for equipment.
Operational Risks: Lower volumes in the U.S. Currency business due to a planned shutdown of key manufacturing equipment for upgrades, which impacted core sales by approximately 4%.
Integration Risks: The integration of De La Rue Authentication Solutions into Crane NXT poses potential risks, including the need to achieve expected synergies and manage operational changes.
Acquisition of De La Rue Authentication Solutions: The acquisition complements the OpSec business and expands security and authentication technology capabilities, expected to contribute approximately $80 million to $90 million in revenue in 2025 with an adjusted EBITDA margin of approximately 20%.
Record High Backlog in Crane Currency: Achieved a record high backlog with a book-to-bill ratio of 2.4, reflecting strong demand for anti-counterfeiting technology.
New Multiyear Contract with Major Retailer: Secured a contract to provide on-site equipment repair services in approximately 450 U.S. locations, enhancing recurring revenue.
Formation of Crane Authentication: OpSec and De La Rue Authentication combined to form Crane Authentication, providing a unified set of products and services.
M&A Strategy: The company has a robust M&A funnel and expects to execute additional transactions within the next year to expand market positions.
2025 Adjusted EPS Guidance: Maintaining full year adjusted EPS guidance range of $4 to $4.30.
Sales Growth Outlook for SAT: Expecting SAT sales growth between 19% and 21%, including De La Rue, up from initial guidance of 3% to 5%.
CPI Sales Guidance Revision: Revising CPI sales guidance from 0%-2% to -2% to flat due to macroeconomic uncertainty.
Full Year Adjusted Segment Operating Margin: Expected to be in the range of 25.5% to 26.5%, reflecting dilution from De La Rue.
Free Cash Flow Conversion: On track to achieve free cash flow conversion for the full year between 90% and 110%.
Shareholder Return Plan: We are maintaining our full year EPS guidance range of $4 to $4.30.
Shareholder Return Plan: Our M&A funnel remains robust, and I fully expect we will execute additional transactions within the next year that will continue to expand our market-leading positions and add further resiliency to our portfolio.
Shareholder Return Plan: We are also building momentum in key strategic growth areas.
Shareholder Return Plan: We achieved a record high backlog in our International Currency business, which gives us confidence in our full year sales outlook.
Shareholder Return Plan: We are proactively addressing the direct impact of tariffs through diligent management of our sourcing and manufacturing footprint, pricing actions and utilizing CBS to drive productivity.
Shareholder Return Plan: We closed the De La Rue Authentication transaction, and we're excited about the launch of Crane Authentication.
The earnings call indicates strong performance in gaming and SAT sales, with growth and improved margins. The company maintains a positive outlook with a strong backlog in international currency and plans for U.S. currency redesigns. While there are concerns in vending and unclear guidance on some fronts, the overall sentiment is positive due to optimistic guidance, strong financial metrics, and strategic acquisitions. The market cap suggests a moderate reaction, leading to a positive stock price movement prediction.
The earnings call highlights strong financial performance with record high backlog, strategic acquisitions, and new contracts, indicating robust demand and growth potential. The Q&A section reveals confidence in future growth, particularly in the gaming vertical and international currency, despite some headwinds in other areas. The unchanged SAT guidance despite a strong quarter suggests cautious optimism. The focus on M&A and margin improvements further supports a positive outlook. Given the market cap, the stock is likely to experience a moderate positive movement in the short term.
The earnings call presents mixed signals: moderate sales growth and strong backlog are positive, but declines in core sales and adjusted margins are concerning. The Q&A reveals uncertainties about tariffs and specific growth rates, which tempers optimism. The stock's market cap suggests a moderate reaction, aligning with a neutral rating.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
