Crane NXT (CXT) 15 Feb 242023 Q4 Earnings call transcript

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Crane NXT Fourth Quarter and Full Year 2023 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded.

I would now like to hand the call over to Rima Hyder, Vice President of Investor Relations, to begin the presentation. Rima, you may begin.

good and operator, you, morning, everyone. Thank Hyder, want to Rima quarter earnings NXT. Vice to President I and XXXX Crane for Relations, Investor call welcome fourth of the I'm all you of

slides we via on cranenxt.com. our be accessed Relations A we Before of Investor the will during call can the website this our of available today's website. reference section replay be presentation at also begin, will

encourage explains Before on all risks our we I listeners notice and which results, the statements non-GAAP Slide review forward-looking X, of financial the to of legal use discuss the measures.

you cautionary forward-looking earnings to XX-K Additionally, to we of our XX-Q bottom and at statements. our refer and Forms in the language pertaining the filings release

the are the the tables morning, of reconciled our numbers in section. On and goals During presentation, available of accompanying end cranenxt.com Relations GAAP well to using call, as the for our on and will highlights, XXXX which Investor also discuss our comparable at strategy this in we this press call are both financial guidance will as be year. at slide website XXXX our release our which and results numbers, some non-GAAP we

today analysts Executive for Saak, Financial questions. our to are with President and our our prepared Chief After Officer. For discussion Vice President this open will Officer; call the me Cristiano, Christina Chief and Aaron Senior and remarks, we

me to turn let Now the over call Aaron.

on our year a and the of so well company, everyone who associates our Crane moment made We start and the industrial thank full NXT's our to morning. you, journey a to XXXX appreciate premier XXXX quarter of I joining year XXXX. marked outlook Rima, as wanted good and as as to Thank successful. and XXXX world fourth call around all for take the that results reflect discuss technology

disciplined successfully people grateful this launched to team. In I more be matter, we of core values couldn't leadership April, outstanding our out business. new team to built One and our be of continued operating part shared corporate is approach our the our company, proud and and

to authenticate $X our our We and technology trusted secure, vision our that customers. matters detect a to strong also solutions most partner, X-year the building established what billion, providing company position from grow as to

of confidence an and finally, As in we organically X% we us and profit free company are the free strong believe giving cash to we our performance, for our ended proud the XXXX. year accomplishments adjusted of growing very to operational adjusted allowing further move we strong XXXX. And first success. XX% we year long-term on our as announced conversion with set Crane EPS with with our as a for first is by above have our dividend M&A A us XXX%, pipeline. developed yesterday, guidance. and segment we our I'm We during by of for XX% up our acquisition And forward track increase delivered revenues our over of delivering pay operating company down adjusted hallmark flow flow. cash strong debt NXT

profit points above guidance this sales guidance. 'XX Moving had We year key basis over results full of close segment to in to our well by or billion revenue at results. improved very and financial $X.X of and all of margin metrics. guidance out year, our with 'XX on XX our with executed line X%, core We ahead operating delivering growth our

the EPS outlook. free million, above was of XXX%. EBITDA cash high was $X.XX full year conversion and Adjusted our also end guidance, exceeded $XXX flow of our Adjusted for which was adjusted the

'XX, $XXX million X.Xx. to lowering enabled debt leverage of us conversion net Our ratio very strong our down in cash pay to

saw the X% release guidance adjusted in Crane this to continue starting of of the plus as $X.XX, you negative the to our utilizing in which Christina? the on 'XX going of EPS that, focus on system. the power our Christina disciplined an now in hand full sales QX yesterday, as year call I'm and as core us to 'XX over We financial with over earnings X% risk-adjusted and in our growth XXXX, to more execution we we're year And dynamics will business details to appropriately businesses. With guidance to is through given well believe walk our performance details guidance. more provide $X.XX

year great we a NXT. the extraordinary celebrated Thank of to close you, Crane launch where Aaron. What this

our like work growth in accomplishments segment Slide hard adjusted associates, a significant thank $X.XX. period testament We with XX% would dedication X. and of approximately of congratulate of short of global I quarter operating sales margin this on had and and time strong and to adjusted of to core X%, the Our fourth are EPS a everyone. Starting

flow our As with demonstrating on line Aaron free mentioned, was expectations, adjusted operational cash consistent XXX% in conversion over excellence. our focus

core an points our operating growth, QX operating is adjusted which XXXX, execution were $X.XX, segments. sales which for For of continued segment the of of beat and also EPS end we X% over Overall, top and pleased both we XX are results expansion the XX% the margin, adjusted full which underpinned year, by guidance. basis by disciplined year-over-year; had with

basis execution. lower fourth of adjusted year-over-year, a points pricing the segment. sales segment XXX CPI our strong XX% in operating offset Moving reported product volumes mix, margin X% decreased as an decline by quarter reflecting to And in to and expected. core unfavorable

and retail discussed been delayed. by this softness our decline in on in customers was As to where in driven market end market orders, new our have inventory down end projects gaming quarter, primarily draw continue where we last their overstock

approximately of backlog significantly come beginning what we consider year, would down normal. we at the X.Xx since our the are has still While

demand our inventory working with assess the are We closely. our managing customers timing of their to levels very while also

than line more offset CPI which basis sales margin core inflation. we points, expectations continued year, disciplined of our full expansion at grew adjusted in the and by delivered For X%, with pricing, XXX driven

Backlog we growth by strength ahead driven to expectations core favorable The in Moving Currency. was sales currency international XX%, margin improved the XX% operating points a year-over-year, prior quarter Adjusted continue fourth to segment through the mix. well Crane as multiyear orders with international will business. levels new in our year from of This basis quarter, elevated see the backlog significant in was reflecting which of XXXX. up XXX secured our banknote contribute includes order business. to

the Currency bank declined U.S. in unfavorable For heavily performance exceptional X% more reflecting business, sales with XX% margin the full where year-over-year, of Adjusted production segment year, mix lower notes. basis Crane operating points had denomination growth. XXX was toward skewed core

sheet. balance our to on Moving

million flow Our adjusted $XX quarter. was free cash in the

another term cash financial million during have loan M&A and now criteria. billion million quarter, the $XXX ratio substantial In of our net repaid loan. million to meet down We leverage XXXX, $XX capacity over our X.Xx. reducing flexibility free in Given to we the deploy strategic strong of term paid total, fourth flow, our we that of opportunities $XXX $X acquisition and capital our toward approximately

Additionally, dividend of we our to continuing annual flow, deliver an based cash increase announced value to our XX% to our our commitment strong on shareholders.

Moving to XXXX guidance.

our deliver returned the this Crane to growth core the stay to to full sales new adjusted with related the track paper range X%. And equipment Currency, X% of banknote to in midpoint that series. to on plus minus $X.XX fourth to after upgrades return operations gaming assumes quarter making $X.XX of for range U.S. normal shutdown the expect We orders between we CPI. for that EPS in The to of planned growth in year

on the half to Given these of the market. order weighted more be the international based CPI's I in wins phasing the acceleration see flow earlier to the end retail second potential in want in guidance gaming dynamics, toward in that revenue historical projects of We than currency upside our additional our of point and year heavily resuming out expected the performance. will market for XXXX opportunity market, versus

continued guiding full to are costs range Corporate reflecting expected margins the pricing from driving to XX% run through system. a million, productivity reflecting the year that year. Crane $XX hired We rate last business are employees disciplined and were XXXX, to of an for increase be expenses in approximately segment of XX%,

expect $XX reflecting to nonoperating paydown cash of flow lower expect expense we we at free interest approximately XXX%. convert adjusted debt. of expenses XXXX, to approximately Additionally, the Similar to million, due our

Let me details within on additional each Aaron back it our key outlook segment. impacting for drivers to now hand

Thanks, Christina.

I Crane Currency, micro-optics to At on in highlight Slide growth outstanding we of and market want technology. further some XX. of Moving the playing our in delivered adoption XXXX. out to XXXX increased international an share performance core dynamics by see sales we driven our X% with

an multicolor micro-optics opportunities XXXX technology the of now international that The our are from this through And we business, as increase designed first XX currently of rate when provide this provide XX% business our total XXXX. Also, technology And a revenue. new designed using this generated to years will reminder, significant and RAPID XXX. we countries, of in in being our the is new interest international a technology customers is the XX% come has growth to year-over-year. approximately to growth denominations Currency's from in world's 'XX as Vision, we our XX Crane the launch half acquired specify technology. denominations Now added bring business to micro-optics approximately

XXXX us positions ended well XX% with very a of we so XXXX. growth this and backlog And for approximately

the I the U.S. of impact work everyone and the half in want doing new U.S. and currency business and other 'XX very it the the prepare And a for comes from customer. from remind government, Currency currency Crane important Now the about have to revenue we're long-standing on to beyond. will program

remains the the paper, expected bill U.S. sole to be relationship to discussed, optimistic we XXXX. every position tailwind in supplier redesigned about of government XXXX. and long-term the new business our public a be previously we've new the U.S. this a as held be tremendous very is culminating by on currency X with XXXX. This since to will in with note with this program And notes, $XXX As $XX released its track note followed bank continue as a to years, the starting their the

to their technology. technology leader $XXX and bill U.S. additional we government U.S. are optimistic in new only in designs. Today, that security Additionally, our banknotes, incorporating very the be a will micro-optics contains continue the features

see we going for technology these to opportunities new additional bank notes in incorporated So be forward.

to QX program of necessary technology. we to production months stopped of As the Printing, one upgrades with complete accommodate for late equipment Engraving in in approximately facilities Bureau part of U.S. the close and papermaking our this X currency new in very coordination XXXX and

the we U.S. government. reminder, business when the revenue a recognize for this we for As produce paper

sales the So throughout of to the continue excited be forward given to we recognition products our with to bring 'XX. for this a future of to both important policy, increasing partner that advance increased QX of for the government scheduled currency the year-over-year in year trusted very will U.S. growth produce gradually Currency, technology then and the begin revenue we're flat we as And for of shutdown next be program in and half the new late the paper expect shutdown use in 'XX. Overall, to Crane and with opportunities very micro-optics. look first

excluding In in strength Now see We momentum XX. COVID services moving expand vertical, expect grow to continue to field off with momentum from retail seeing our vending digits we we're in grow financial XXXX, particularly the our in CPI service the in of mid-single and Slide our XXXX. also customers OEM coming gaming we vertical. to lows, where our recurring growing coming end see our out market, mid-single revenue. And offerings we positive digits, business business

headwinds levels customers by we're pandemic. will orders to communication been in very their As returning heightened CPI's healthy and underlying the to in leadership and in customers in navigate still forecast term we the result to seeing the growth the are need we close in scarcity QX. This in Christina gaming. for the markets, well as mid-single-digit services. software The maintain positioned of and we believe will gaming to our with market through our of including new to levels Based working inventory return to growth pre-pandemic the deliver gaming labor down now and We've continue underlying is mentioned, orders automation, end gaming in position is that end QX. hardware, as our increased positions on long these of transitory slower inventory due strong continue drivers business

to we track us M&A, and simplification M&A. And our and a Crane execute strength disciplined map As in believe fit This our along the the of conversion, significantly on of continued drive to cash transaction the of strategic terms with to targets XXXX core to execute planned. portfolio. the and includes reinvestment in Crane the diversify grow our businesses, ahead, on in will productivity, that we as road execution pipeline of we're system enable X-year our business NXT look

aligned authenticate cultivating us assets. to that look secure, tailwinds on digits long-term greater These CBS update forward above and actively more technologies durable our year mid-single will most enable than and I companies at focus come and to of services to achieve secular drive and markets detect drive are are We utilizing with appropriate X, customers' value. a by to the growth area, valuable differentiated a in time. to an providing XX% Certainly, ROIC this that

the mid-single-digit the work to growth normalization our to ample with to final on drive our XXXX Crane we to for U.S. our creation providing drive launched investing and flow be business shareholders. for commitments year gaming currency customers we start first will that conversion, strategy returning the inventory series through strong accelerate cash journey Moving strategy, of CPI In our the believe page. us XXXX, the long-term banknote building value our our this our allowing in and to company, leadership We growth and M&A dividend was increase we as on liquidity continuing free NXT. transaction. established also up delivered in will while our for as a financial technology it significant new execute

Taken profitable confident achieve our to ability our stakeholders. drive objectives, in for and value together, substantial create I'm long-term our growth

to for again we're take this and ready you first thank your question. So morning, time our

first Summerville from Davidson. with line [Operator questions Our Instructions] of come D.A. Matt the

and through end the a the little the a weighted impact. have first think kind CPI of revenue we be of the dynamic, With dynamic. sense, to Walk how made how more respect cadence? of I regarding given day, much At trying shutdown then comments half intuitive, kind second makes the to should likely half follow-up. that about is half, earnings currency detail understand to and second in first gaming And bit that weighting, of very half, the totally you

your Sure. good Matt, hear to voice.

So just currency. in centering on

U.S. So material revenue. government us recognize again for is again, how the in the just first half we shutdown in to the business,

production. As I that revenue mentioned at in recognize the of time we prepared remarks, the

shutdown of papermaking part a impacts our So that. of operation obviously

you range guidance that and the and us currency think flat to headwind creating when full as year growth obviously half, expect in first phasing, then overall we're currency to we where then the single take in the low total, point suggests, when So which on second be a to our the in for back that's about the for your that half, in for roughly of digits year. we

of And half for for front on then maybe and the a is finer point you revenue -- weight back half CXT overall. How guys? versus much earnings

Yes.

think guide bottom to that's XX-XX, I both to be simple roughly line a going here, and Matt, going be line. top it's

may denominations design the Crane number Vision. it's on maybe if win phase be bit maybe carry little you as respect maybe RAPID well pretty in then wondering notched the I bit going to what that could with a like talk internationally sounds about And as was little sizable, and to elaborate of backlog, a a in multiyear you Currency the

then start, the maybe at I'll Aaron can jump and Well, end. in Great.

So any contracts have The to that amounts was there, we on but great one next new years. over a that. the in revenue we're can't impact in a there excited on any multiyear specifics customer or the winning QX meaningful order internationally. do X continues team will And really about give

said our year, in Aaron our as to leading our job quality. And the great earlier, and what really ability really customers which deliver to just So commitment need reflects there. XX our wins technology,

So great all just there. really around

and in the the of denominations, right so last accelerating years. in the now, been few it's terms over portfolio XXX Just

the for really again, just business. international strong So currency story

Yes.

Christina's on new point, positive XX many been broad-based. it's Matt. It's That's, denominations. think to fronts, I

expectations, you we up we in exceeded of the while year. in significant a where lot year. really business win and the backlog that's We've the our year, the the materially fourth exited XX% order where quarter, did see we So wins international growing to currency of as the course as through that's the a exited particularly had

an new talks for takes designed and reminder through about this think to the to months several Vision And of that just us. RAPID you it others for getting design portfolio. just we currencies process go to story new that technology is evolution years the think know, technology, I outstanding with the leadership, It a currencies. when know I our continued many

slightly the that for before adding launch us So started the of product.

at to central particular is have We to banks few that next wait them to in announce looking potentially time. the And to design central a years, appropriate to evaluating launch we technology let period that depending have design on But and obviously, a bank. again, months that it their currency. and

come with from questions Karas Damian line next the Our of UBS.

follow-up currency. have I question a on

nice guidance. baked the us what the international and into about Could in you guidance that international your business? have of is you kind currency like your talked momentum growth to potential You for upside year-over-year tell

Yes, I'll take one. that

growth into the on mid-single-digit we based just for it's So our international and pipeline. high really visibility have

So feel confident very that year. about this on delivering we

a shipments the this revenue our impacts is remember, of project-based and our business timing Now recognition.

based But So feel could that overall, vary. confident digits. our mid-single in pipeline, on we

the and looking helpful. to about the there a way where give these for Is really to could headwinds think the bridge down kind company sales you That's about just expectation you maybe XXXX. tailwinds, in a productivity, midpoint and And anything a impacts slightly were Okay. versus the at mix the The us various way then or at price is just guide of modestly overall guidance, thinking your else? may margin then year. be up flat

Damian. Yes. Sure,

the ago, we in that guidance moments remarks and I in believe can break if got question add down as the year and parts. said Christina the well. appropriately some into a full And minutes you think way I of that. is confident the me as you asked when we're with to -- very analysis Again, Let the risk-adjusted few take I think my few is constituent appropriate, on

the as looking less. we're mentioned, currency So when of at just that a business mid-single-digit Christina think margin rate growth bit I of little business, Again, the there.

inside raised. that currency natural a to you've headwind alluding mix of So the question creates

similar given denominations. think had of of volumes U.S. mix of forecast, it naturally as mix a where assuming and a we're international terms what have that can in you growing digits. in we as see shutdown So There's terms is down government volume effect the the currency, just their flat mid-single we at we year in last in that the

Again, term exit the get as on in and government the for So that's launch really the long story fantastic 'XX, business. U.S. to story currency. the we 'XX a of

in be Now to mentioned, the CPI, gaming as ex expect I growing all digits. portfolio we of to mid-single aggregate in parts

gaming, again, of typically Now a said, our with that part is portfolio. higher-margin

going gaming a So do that of margin to burn a driving mix we inventory we complete But give really guidance. the customers as QX, and see some have lot have look the that range confidence orders question the exit the growth natural us alluded with back, and visibility again, should what's and at the set return we we cycle with that's headwind which gaming, in in the our down in improvements mid-single-digit into we we've into to you there, 'XX. is ahead

And because these we the bit mix. revenue phenomena XX-XX high-level question reiterate I again, the think with be really is that the see a would of phasing different company. will that's a than gaming our So to little XXXX, normally government I guide. in the and of asked the U.S. good in Matt just that

helps, Damian. hopefully, that So

Our Bob CJS Labick from line next with questions of Securities. the come

year Congratulations on quarter. great a and

Bob. Thanks,

you. Thank

I obviously, has exactly Could to because there, gaming. disruptions follow last about as just to of on, like down whatnot. feel higher CPI comment I from your chain this supply mentioned wanted out guess, and just up played said, point, off I coming Yes. you backlogs you've talk and COVID you -- in visibility Aaron,

and have corrections should see demand this that visibility So and of and we in back in underlying maybe the inventory the you gives just the that you and talk resumed year. gaming the confidence the about your that to relationships growth in half retail

again market some the or to differences. say an that are perspective don't outlook, we important say why by as believe can gaming, market Bob. down there from risk-adjusted and course we're each exactly the continue this I'd question we do so Sure, we In because is you've through quarter these break forecast do again, going Gaming, to I a of what again, 'XX. asked appropriately

be see a it mid-single gaming customers 'XX, to important OEM digit bring this back a an on to digit the plus, which healthy market healthy. to in global which to least market, want our continue single even as our between and service part thesis, I very it's low course, is to geography. growing here is Casinos continue at highly anywhere of healthy. the dependent market. that's of we And We be

confidence a this way lot of all underlying and So the healthy, through casinos that that market see both, we the gives us that the again, in is OEMs.

channel both done also we are hardware, share, a maintaining lot as checking, we're we've Now and offering. and strong confident market Bob, very services imagine, software in of you can our

period. major competitor we reminder, largely was for but of this in our through out as at and part back 'XX as a market, to this and market good had a of gained the Just think team a in They're share 'XX. I we that testament lacked CPI, market a certifications

higher we have these of a and customer of so sticky base floors a And on set casinos. very the installations

market confident So again, we our in feel position.

only started vast the to And what the it of there's customers lot and into exited gets to spent our we as inventory, the as work few be. our majority January, Now forecasts year globally at customers' December We have on OEMs year both here, we the of when through new a reassessing visibility a and equipment are order in going their scale. sell OEMs.

of see normal their by that a above inventory on that ascribe customer get the And I'd relationships that's would holding we inventory to close with. to. us say have And levels, that very into we short allows it's very where average, they So months customers list X customer. deep of

into that rates that's year, order and a growth very see inventory, the draw I gaming. going they're down in their visibility the year order that good forecast confidence as again, to and knowing what into have think rates we us in exit So get we're how to to dynamic and mid-single-digit that QX gives a we back for going their a return

retail I'll well. and there pause So on Bob, I'm as talk then gaming, to happy

Yes. Perfect.

to go me that. let Yes,

a think starting labor underlying a but we're is improvements we we're and and the driven back XXXX. see market, I'd last as our which by customers the issues go in retail we dynamic where different with I still exited automation seeing thesis off here already scarcity. increased on market, as Again, battling year to needing is very healthy,

And change so ahead, those or to tailwind market. gives that the in we think months don't this next years a and

we 'XX And and in few But right, we was 'XX, when inventory. had expected OEM in that OEMs repeatable our already starts context, remember, put improvement will with own managing that 'XX. business see cost start some are out in their of were which play and very It in it's that significant not you And business, our 'XX, that transitions softer we a than as expect we items in expectations. these transitions, through going OEM meeting 'XX.

pushout some customers, projects and we be to confidence in second going saw with 'XX. and are have discussions those half, believe in back coming also We of in the

meeting market start and gives a that this in our So in the us I already retail and the expectations different outlook. we year, in think us as dynamic for confidence

jumping to and gears currency. over And then Super. shifting Okay.

you how we have the from there enhanced bit revenues talk going But more we how be the revenue. cycle if us it? What kind series comes out. on in do as boost about could play then gave will cyclical become does little visibility, down of general, it color going maybe you the it shut just to How this it's -- rollout play of like about in out is or and whatever good decade when think shutdown because year, year to should out? you? benefit be security a every Has catalyst for this think of the Just you

Yes. Thanks, Bob.

of stages early here the on we're think this. I

you with As take you decade-plus going as But the already the working BEP. right? to it's program, it, to been just said, XX a bills. know, on It's years new we've actively launch

we've shutdowns BEP upgrades, and satisfy this, that has planning the time 'XX to our set over QX coming for upgrades for BEP and one XQ at well of the fourth And of the new need qualify planned demand. and through quarter, make middle again, institute We're in year. their papermaking necessary allow to So that been of that produce just both again, the one the with next to end off of well now, a the we'll the very equipment. us product their product the in course, of they

the going sometime a QX. shutdown Bob, series we'll that's into we year 'XX, We the So for get first then, that half in headwind, see as as the of in goes on then And a the product. means don't of first full production production, of new $XX into will that in latter benefit have until budget. What to track, part is really likely circulation that XXXX. of one is again, the that expected, particularly public target, on alluded on I that earlier, the And and moderate.

I technology it increased density and frame see those think I on we uplift 'XX model as So would assuming, it time the starts start in again, more bills to to in margins occur and frame. that

that But new technology, announcements our we that to the Treasury and earlier of slide the to significant make to appropriate opportunity I those can't, these time. we leading types bill referenced U.S. the of micro-optics increase in that each and they'll as $XXX of on on and to at announce That's you the all think Department believe the if do gets presentation, technology government introduced of that's notes. only new back U.S. has no any today, generally currency. the an now I position to U.S. left announcements go design we're Again, in the bills

up And so naturally this think then we business mix get that but continuously starting as used, I in modeled is I bills wouldn't think episodically, 'XX. 'XX the as new released, term through more you the

with Zaffino Ian Oppenheimer. of line the from come questions next Our

This is Isaac on Sellhausen Ian. for

not is just mix? as assumes get. first then you the on and you think core how that and talk volume price you But and about the year? sales far detailed I'm on can pricing and as in could guidance. maybe about through if what guidance a general CPI CPI how just discussion broader And The sure growth maybe

Yes. end your of Well, of start terms question the in I'll just at pricing.

a discipline Crane our on than really such pricing. great our system, based offset Isaac, teams that great operating business And more Our do here, costs and are have. system business teams that's continuing we job with the to and just

and that So to really expect great job continue. we there,

In just mid-single-digit the guidance, terms all we're growth outside ahead verticals, our of the of CPI in looking verticals gaming. in assuming

So markets said, healthy, to underlying strength. as the we're expecting see and are Aaron continued

tough of some through have said, markets. their inventory in very feeling QX, we work mid-single-digit QX. by to happening which some But OEM our confident. gaming, we should as return levels, to overall, expect customers the We growth And start once major in primarily comparisons

that Great. trends on Okay. And within maybe you're as a the then product business currency. seeing just follow-up market. you Could authentication on touch and

in sales authentication. and mentioned M&A product within expanding previously interest You have the pipeline expressed

So maybe any higher-level comments on potential M&A targets?

that appreciate really I Isaac. Thanks, question. Yes.

general that position authentication. we more the to will for And And for as have rate. physical foreseeable that's core or products growth continue the protection, need So future. confident of plus. its growing a in in product in in we continue those digital very drivers that's We products, global think at in be whether the optimistic anti-counterfeiting mid-single-digit it's market we see very and

market. as to a this in pretty straightforward got believe say, I we'd think that's,

an of continue with In to raised, new the leverage our with area this with technology physical M&A to you we and our strong see can our own that the as very in Crane terms technology. of again, win micro-optics we capabilities our But accounts strategy, in we leadership where accelerator question other that grow really business, leading said, products NXT.

I in terms track remarks, very as So feel year. in at And in that our position also last we on in that a significantly my mentioned the we pipeline be matured It's has of 'XX will first status. we're cultivation confident XXXX. announce as over where our we prepared acquisition to grown exit in and

want through there more to to on business, return. draw by X said we're is strong last can if from We making detect and generate strategy, sure several make quickly based That's or acquisition very, the flow. we And a We able and our important ROIC than to many on quarters. our want value, what authenticate. has free want nothing the very any. said below we double-digit that As secure make we're add particularly of cash X, of And good first I've it's owners deployment the focused to down strong sure leverage over and I've times, on changed X. we're maintaining CBS that a above sure year

So track very good again, feel on and we we're a in 'XX. head into position as confident

UBS. of please? the you're you from come questions with line Karas muted, Damian next Our Damian, if check could

muted. got was sorry, questions. Yes, I'm follow-up I a I few

some get half? First, and then business I you just I Or mishear of want of say to the back first you in currency be you heard make sure correctly. expecting kind the I in Did year to there? you that pickup are half flat did the the

that's the growth, the in international the correct, Christina I'd due Damian. as half government. in alluded the business, then headwind mid-single-digit but say No, U.S. That's to from the to directionally -- shutdown first

right. Okay. All

XX% the just XX% first expected and if this in CPI piece the it So snaps then of in half, worse correctly I'm kind to like trying year half to back outset would or the then, the back significantly XX-XX at really seems then half? destocking and of kind so that of is you the half. second I the to guess back then guess, then kind interpreting and year-over-year like in be first of less decline of like step I'm suggest second half, kind which more get together I like

I going of you elevated that at right. have We're Exactly, hit on level gaming where year. a CPI, in the still very year-over-year first last Damian. first to think tougher in was comps half half the

is your So there logic correct.

think I curious whether was Okay. And guys have denomination the the you just alluded you thinking do in about I will appreciate sense $XX When here redesign a that. better you -- involve sorry, to cycle you earlier, but then clarifying micro-optics? if redesign if this U.S. might the I

the BEP. long-standing come more And to as the 'XX. government. very appreciate that, on line we on I in I in sometime until with I after feel that confident late redesign before, comment that not announcement. can't would you Again, think new position than U.S. the that's the will time be we're it's on expect we would their can I relationship redesign. announced ours to But announced comment answer any by actually But that that has said in going our the until treasury

the Davidson. with from come will Matt D.A. Summerville questions of line final Our

Yes.

just it. first mean, but the think to You sort bad finer said should of my How doing make the it assumptions. prior with getting to How this not the in answered structure the going in wanted in that But a put just skis in on business year. based there. going we business. be will adjust about anything what And is this of better to want half are hammered a delever? on -- CPI near I'm point context? kind very to you questions, organic of margins term word get that I to down CPI sure of respect the to I you my substantially I over if cost lack taking is in

too, the Matt. of think I at look balance it Well,

digits. orders still a think gaming. going XX% the that's I these have in on growing we're XX% of roughly at directionally, tough offset That's comp portfolio to roughly the by in mid-single headwinds other

math. So that's the balance the of

half with probably then, for half back to. you balance second this growth mid-single-digit course, on you of the alluded together, first quite track and as of tell the Now would CPI, And come second out isn't put the you year. when that we it half, I of the

true to taken think it's we've we're actions the rest and and think we've how some operated I business and our already obviously can the that, adjusted the headwinds. margins CPI course, good, discipline business healthy structure these we and of a of to invest grow, we cost reflect as maintain some of cost of and culture you those and we've fortify taking assured, the we to I so actions of

wouldn't quite thinking. it's think certainly, So as maybe as drastic you're I

like questions no would Aaron at this There for over to are hand time. the back remarks. I Saak now to closing call further

operator. it's a by anniversary of first believe, year from NXT. away to Well, launch been and are just hard team. enormous flown with but the days accomplishments Thank the our It's by that All we of is you, filled XX right. Crane

want year all hard will And year an confident their successful. we again as for the to equally be And across so 'XX that the of NXT make I the thank XXXX to extremely public world in a work company launch I the for start second NXT exciting team as so am Crane members from our company.

all hope you again to everyone thank us rest week. a joined today great and you So questions, your who for have your of I

you. That your We participation. conclude teleconference. appreciate Thank today's does

day. Enjoy the You of may your disconnect at time. rest this