Crane NXT (CXT) 9 May 242024 Q1 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Crane NXT Q1 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Rima Hyder, Vice President of Investor Relations.

good and operator, you, morning, everyone. Thank to Quarter XXXX want welcome NXT. all First the to you earnings of I call Crane for

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

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

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

the slide our website we section. call, which are the numbers the on end reconciled presentation, During are press available to at GAAP of and release Investor both also numbers, our be the Relations of accompanying using non-GAAP comparable at which tables will in cranenxt.com in

the On our the morning, discuss and we OpSec will call financial this updated guidance. completion acquisition of the XXXX results, our

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

the me Aaron. Let turn call now to over

announced appreciate Thank about more the to We Rima, this quarter you, and call and good Security, week. to learn acquisition we everyone today XXXX which the joining earlier morning. discuss OpSec results our first of

industrial company are well way NXT. Crane We here at a our become technology on to premier

$X is in most our investing to the diversifying businesses of billion protect in Completing major in increasing strategy with when becoming our our a milestone growth ago, our operational through trusted a clear our and and launched assets. we a acquisition had core we important company to excellence, months technology XX sales. portfolio, solutions customers' maintaining company, the journey our for OpSec

the strategy leadership associates growing I'd market. worldwide. with special expanding like M&A and our a of to OpSec aligns in authentication first transaction, our OpSec give our our As large to welcome

that of thrilled Crane are NXT you're the We part family.

and this we're acquisition to segments. of announcing alignment towards part our serving As customers an reportable with a better, our new eye

Security We most are the minutes. or Currency Technologies I'll new valuable growing segment, And segment our believe Crane for with about our on a short. Authentication aligns few SAT assets. and authenticate technology and secure, this in that We customers' our better renaming talk more strategy detect solutions

results. to Moving our

performance with expectations. was first Our line our in quarter

range of track on sales and high of With a the X% the new guidance targets year mid-single-digit to our and to for their increasing EPS deliver to $X.XX. XXXX. full Both of acquisition of single-digit to CPI businesses financial $X.XX Currency OpSec our guidance closed, growth we're X% to reaffirming are

our continuing Currency, leadership first we share about Crane new and and new investments orders its I'm the equipment to U.S. won particularly with for In a business, program banknote the U.S. the gaining in excited technology micro-optics in globally. quarter, on our win bringing to decade-long the denominations preparation international X upgrade associated in And with track our total XXX we're redesign to growth. Currency market.

step to to diversify OpSec place journey. balance and in our Finally, we in expand the portfolio, a continue have further was sheet and first strong this

Slide X. to Turning

our security in the development authentication decades OpSec and protection As optical leader in of is which of position market. we the global acquisition OpSec services. completed with more a have announced authentication online Security, this brand technology protection increases expertise and growing earlier than in week, solutions significantly X brand

are provides through Authentication products, technology, this authentication digital used on tracking goods including as tracing Solutions OpSec market by platforms, to strategic goes slide. consumers. of and Platform, monitoring, they and with of X its OpSec enables shown which as Through supply physical chains

its Brand platform, fraud and online counterfeit anti-piracy protection content monitoring for Online services. of OpSec Through Protection provides goods,

physical business of offerings our secure base a authentication to end-to-end authentication chain. physical and digital and solution by product complements NXT assets and our deliver growing and full product the customer offers brands. product brand enables and world's company expanding to the The the Crane This most acquisition value entire recognized

OpSec base, Additionally, and The growing of high profile generating financial year-over-year. an and has mid-single-digit and a has attractive comprised revenue reoccurring stable revenue digital business revenue. percentage a growth of recurring

tenure relationships customer customer XX customers. Additionally, OpSec's its an with business among years of post resilient, long-standing average top

at OpSec Crane and will that position strategy to strong XX% and $XX a OpSec expect secure, most $X margins. in to adjusted giving us extension growing million XXXX approximately EBITDA customers' in assets the revenues our detect natural billion in authenticate NXT is authentication We contribute important a approximately $XX our million market. to of

the of the solutions. the NXT key authentication physical and this OpSec We a One of digital exciting brings differentiator for to capabilities is combination as company. see

digital holograms. chart of include The proprietary of enabled first technology, the variety advanced revenues offerings approximately a XX% slide, the As software. on containing anti-counterfeiting OpSec's including services, include through physical shown labels on

to scalable of abuse brand licensing content the online that and also against of a platform manages NXT properties and software brings and brand detects products, OpSec traceability infringement. enables enforces the

majority with approximately We it the high a As rate. a The reoccurring remainder contracts. represents sales. shown one of more of renewal nature, recurring revenue middle with years to XX% in OpSec durations the has as contracts customers of refer that pie from very OpSec's is or in sales of long-standing from this primarily and revenue, chart, come

pharmaceuticals of diverse media, and provides further digital including page, goods, OpSec Crane combination as recurring NXT. physical Finally, high increased as revenue, a technology, sports of consumer diverse industrials on agencies government the and and to as global the The reoccurring institutions. shown chart and of and and well on set base financial companies resiliency adds in OpSec's side right customer the offerings, and capabilities markets new end has

which acquisition, to this connection will and OpSec. renaming of our Business we're consist segment Currency, reportable the Currency Crane Technologies, earlier, with and mentioned As Authentication Crane in I Security

technology our our be product further an efficiencies. with authentication customers with and This Additionally, business serve OpSec. to driving will existing combined expanded portfolio growth enable structure while business updated also better will us

updated effective results. and quarter financial The the presentation the on XXXX in first of no quarter's second has segment will be effect

new working part also as him As and job past Crane this Sam new for and segment. the X and Vice structure, excited he a Technologies President closely NXT Currency done segment. leader Crane Authentication by role of fantastic Senior leading Sam's with the forward to this I I'm the Security of promotion to look of years, the of of Keayes grows

enables continue to our strategy accelerate the our we and portfolio. diversify alignment as this of us believe company to expand We

would I'm year, also started around like for In how pleased results OpSec M&A with their the to to deliver efforts the first thank while closing the transaction. with our our employees quarter our summary, world transaction. we first I especially

the hand over details to guidance. to walk going as us quarter now as first updated I'm provide call on Christina XXXX more through our performance our to well financial

and you, the Crane Good their also like everyone work the call And NXT. for welcome team to our Thank hard continued appreciation morning joining to to to today. Aaron. associates express to global OpSec I would

were the operating X% margin year-over-year first reflecting results Adjusted volumes, flat Starting across productivity in and on approximately first expected of XX% segment year-over-year, quarter the sales despite Core by sales both comparison quarter XXXX. X, lower our segments. CPI of a declined our line to Slide strong was expectations. lower at with challenging driven

flow cash normal free timing Adjusted of was impacted and seasonality the by working capital.

program. banknote CapEx our investments redesign higher U.S. in the continued have also to related We

of adjusted Finally, track our EPS $X.XX with guidance. full is year on

and The draw levels productivity gaming core lead sales lower continue sales unfavorable first Moving as margin to the mix to end and pricing in our Backlog, quarter resulting was orders. product in and an market basis of decline initiatives. reach execution to continues which the to segments. the we X% due due the reflecting a points year-over-year, expected, elevated segment by expected. to decreased inventory times, come the extended overstock XX% volumes strong to of on by track lower market, Adjusted gaming offset quarter. CPI lower normal as down, end on reported performance to in was end are XXX more new second in operating down and customers

working customers are services. demand maintaining strong are their in our underlying the understand position our gaming Overall, software with accordingly. and to and market offerings inventories we with managing and We closely be healthy, our share to continues hardware,

our non-gaming verticals quarter. gaming, other growth expect mid-single markets of digit, be we and with in to Outside last growing what the the expected, line year as full we communicated in end revenue are

so we year-over-year, program. our the U.S. points being Crane reflecting operating paper the make Moving volumes core upgrades to Adjusted equipment necessary to due were segment mix improved making banknote some related the redesign as increased slightly down upcoming in basis quarter, off-line XXX to margin U.S. favorable sales of lower productivity. expected, and which is for could Currency,

Overall, to the that to moment our be and our banknote continued discuss backlog, accommodate are which making further is strength I'd new we based the have take a our the U.S. year we like to technology high XX% investments international upgrade commences and XXXX. series in of up for confidence in full sales strong, designs to on the projections year-over-year. new equipment to

for The year. require this very to of taking of this phasing upgrades Printing the equipment with on time, revenue off-line We some are an has period a which impact of Bureau happy our partner and program. Engraving important necessary on

our very well, schedule. resumed cycle, production first results, QX impacted which The on went we upgrade and

into quarter of quarter have in will beginning of another the We upgrade continue first which fourth XXXX. the this year, will cycle

confident to reminder, paper U.S. revenue We related repeat cycle a that As lower to expect investments Overall, government. as are provide QX very will higher for normal and by production a in be upgrade opportunity. growth the the resumes. as the making partially midyear we produce offset are multiyear revenue QX. us and we the currency experienced in will with we excited This recognize that new are revenue series about we

balance sheet. Moving on to our

million net first to with approximately OpSec acquisition borrowed fund end of the along ratio In the X.Xx our at Our on revolver was quarter. we hand. cash May, the leverage $XXX on

As debt year. with continue flow with further X.Xx, M&A. generation, leverage close we cash down our is free will ratio which a result, our approximately strong And pay us post capacity the throughout to ample net provides for

XX. guidance XXXX on Slide our Turning to

impact We the are to reflect updating guidance of acquisition. the OpSec our

with businesses. XX% core million We expect to for X% the for Crane adjusted in guidance This sales provided are OpSec in $XX overall growth sales margin. CPI X% million translates and Currency $XX to the no EBITDA approximately revenues There February add to to in to changes XXXX a NXT.

interest approximately operating to increase $XX XX% reflecting expenses additional to interest to of OpSec segment $X.XX EPS year XX% range remain income the OpSec adjusted from for Expected our expense. related to for the to expect incur now will $X.XX million adjusted as by full margin operating $XX related at dilution is million of borrowings to Nonoperating in acquisition. higher the We we be as OpSec. offset

OpSec adjusted our expect EPS accretive to We be in to XXXX.

turn Now Aaron for the let to call closing me remarks. back

first we clear results conclusion, to quarter do the to in driving M&A are were we Investing Thanks, our our executing and portfolio. diversify In with productivity a and going expectations. doing said expand of our business, Christina. through line CBS, on what example in core and

significantly are we track grow X-year our to strategic map ahead, on NXT. to road Looking execute

our results growing Currency at CPI to on year We strong mid-single is and see track continue from the digits. exit to business

and M&A our Given diversify detect cultivate services most with valuable and assets. our we a technologies customers' strong our sheet, pipeline on expand and our differentiated to portfolio to focus and through balance secure, that M&A authenticate disciplined further strategic continue

unique value we a deliver our capital leadership, strong and foundation very long-term operational drive to shareholders. for have growth our profitable with through sustainable ability create will differentiated strong drive on position, place I'm our confident excellence long-term in and We and objectives, CBS, and technology

take team you Thank NXT our morning. all the this And your would their NXT thank first to for our to and And like OpSec now the to operator, associates to for again of ready question. welcome dedication time we're family. around again I world the

Our Instructions] Davidson. Summerville D.A. question [Operator from with first comes Matt

that I outages the sort background mid-portion obviously known there's drawdown noise, the stronger you in goalpost the And year, with inventory traveling. am year being well have some around right, point. parts is ongoing with the then Apologize, the business this of the some, of sort of But seemingly and at is moving this Currency. gaming

moving those help therefore, right kind the -- of pieces, us which what's the So quarterly you profit... think maybe the of to out operating way savings can about businesses think for and

from hear you're Sure, to Good Well, right. Matt. Thanks I think question. for you. the

think would I how exactly up it. it about framed you think I

So inside as of CPI, communicated as of in just gaming quarter. last expected we we the burn business performed again, that backlog continued with down

in as our expected, of trend inventory We those we gaming. levels to sight saw expectations. with customers' have line our again And

see are in on as resuming we orders in expected, commensurate what we revenue, what QX again we where CPI year quarter. And building with for last again, in other verticals about again, revenue, So coming CPI talked is in track, digits in this with thought. QX, of exiting mid-single Matt, doing kind the growing in

is So verticals. I exactly gaming performance by the rest of think CPI burn consistent of this down strong the followed from

what to a year. And mentioned, mentioned, using talked about we've the remarks, quarter in with Christina your the a of story and very first As as winning less book-ins, for strongly in quarter prepared will seen the really words and applications upgrades in fourth little new linearity on international continues us. going the in than then backlog Currency, a the And the that year-over-year. it's though, mean, Christina that stronger then business of the past business, as of part XX% we up perform middle micro-optics and on

we business. Currency So about the international good very feel

just putting terms that this years. than again, seen in we've less in of linear Again, little past together, a So all year,

the lower little skewed Building half second of part And a First bit QX. the in in middle into Currency year, the then strongest probably in CPI, half.

improving saw again, the with what in business roughly rate, would what at margin and we full we much as expected, with same the be XXXX. year, that, margins again with So to doing going in in CPI where for with coming CBS have continuously we we're line believe, very the

of when U.S. the saw than making, segment Currency with about terms operating in we then upgrade, And particularly margins think last you investments we're less year. this slightly in

you color lot a information seeing. So little of more what Hope that we're of there, a Matt. gives

a then international on of the And side Yes. point the final business.

a puts denominational new the new in of my XXXX. first was wins wins denominational You quarter. in record on what X already annualized mentioned recollection, above That an you pace number

So for maybe for projections kind government of you the the And is you the trending. does midpoint, around look versus the talk how international funnel if organic about full how business, international that will, to relative Crane Currency U.S. that have year?

technology, of company, technology-forward the so and appreciate that is good We that's and the question led acquisition business. And the builds International. really This out starts a platform technologies. Sure. you're Well, the I on and first OpSec in authentication of set hallmark right. wins had with this quarter, more our really a of new by security even in

anyone, are I Matt, episodic. as think as bit little Currency know you the wins a well more in

So I think full I trajectory that. about to year. is the wouldn't quarter But quite you're extrapolate right. right the first fully And the

year. on management expect to to we new win. continue we've we're to that We on average, said, under denominations And XX XX every year, a as pace this do

for Again, has long different timing operated to a business how different wins, this time. consistent with

look get really looking quarter at at starting delivery into we and to customer I where into particularly backlog, at XXXX. second now our as think get we we're now, the we're

know, we to to between frame strong think from And anywhere time X- XX- confidence run business. I in deliveries backlog, the you have 'XX, we that's go 'XX with as continued a booking. confidence into XX-month International the a with why and As

but 'XX, So in but that's that starts business us, hone to our the outlook on on create confidence of to 'XX. an positive more just for naturally strength starts on the I dynamic the to think of

ongoing did example currency months. what team job in government, just again, upgrade mentioned, a our in of improvement the program we're the upgrades a terms QX, fast focused as last capital again. CBS now in mentioned And excellent U.S. Christina several just, production this expected significant and In preparing It's is QX. very very fantastic would again, the I company, large reiterate work an at of a in for, executing action just on of as Christina in

their very is time expect So to the going as work expected fully appropriate in we And program. we Department announcements This with positive, the new we at in know, Treasury are we how be you BEP. will follow the feel And how on for of That's the on with as our question we're mix line going the currency of that. what making be the U.S. business volume lead, the year-over-year. first at outside in the and holding flat we've is expected on production, and prior But year designs. obviously track to their see bookings to terms we in year. how forecast we've your business

last Matt, we pretty what quarter. with said consistent, again, So

comes Our Bob next CJS from Labick Securities. with question

Great start to the year.

Bob. Thanks, you. Good hear to

guys you Yes, well. as

We a news. lot big So the obviously, OpSec's knew it. about of

since the closed strategy articulating fits been you've You It's It great. pre-spin. it.

that the into impact you all, fit? you help if software does next Now be how OpSec's put Will acquisition does to customers at shape more how, or few How acquire now hardware acquisitions? this to more it strategy? part does platform? your for your of and or closed company, the looking And it

what strategy Thanks, Yes. executing seeing of And hope and XX ago and ago, markets the growing we everyone this, detect, around laid comment, months the going I that there's we exactly we're in XX Well, the our company. do to are it think businesses months said out grow Bob. the appreciate thematic the I now really we them. that a secure, opportunity way, a lot we and launch around fragmented. doing since authenticate have to moats of portfolio large, in And with that were of

there, and unique really this player. technology now with can announced that. highly to which market, we and new And and is we And believe at billion service growing the segment a grow, we $X are leading continue because think, OpSec, out companies example we again, fragmented of part area a fundamentally digits, we it's mid-single structure an together put of is OpSec a of why great Currency

your continue to to very feels that more. us where we good question to So do can

focus, through making Currency. our investments so you'll that's to grow we've growth walked as we're we're to about businesses. coming as OpSec. to sure both closed. these Now really the more the And strategy first there, have certainly Bob, includes portfolio is And and grow I'm into even we appreciate Christina excited that core that the

But and one think your believe you as solution differentiated I more that it's the opportunities differentiated about wide to together. putting the capabilities very together technologies themselves, include it's other, And go which see niche digital both those I a both offerings can forms sticky here. think also with question, or enhance we both don't moats. do but

where and future, out the vertical more that And we media, lot see are business this pharmaceuticals, tailoring playing in see inside fragmentation see to the additional the even more new in consumer, that's together, government where whether markets, of you and pull could we where and to businesses the assets the sits the solutions set, OpSec that's again, segment. inside that's a individual still competitive opportunities

we more. us this, our a and come fantastic out X.Xx debt that do And leverage of with ample net our to position capacity at go Bob, in gives

our X day so in the that's of focus. post announcement We're And OpSec.

focus colleagues #X synergies see, OpSec welcoming into out particularly going commercial we the the and our new and business go our is to customers and side. the our So integrating to achieve on talking

we optimistic funnel process to and opportunities disciplined M&A very on where minutes just we're our as year my said, a very ahead. I of a we're in strong that feel, with again, leverage, headed ago, going in And comments the with here alluded and have continue to a few

business, new term, I'm both, expanding customers And share new your of of lack And or both a that answer weighted terms with how we the wallet I'm it's growing the sure up towards think the where the in how think would of about following logo of towards a growth existing existing better with answer. to bit well. is customers? more just be But but going sure question will of bit And ads you will should OpSec more weight for it? of a or as this be Great. Okay. forward? kind

I both. am to to I And yes -- and going with of a services. response that of benefits I good their encouraged right. the mean -- of micro-optics positive a clear acquisition lot technology, sincerely this the to We've bit pleasantly say, into by includes a that customers OpSec a the you're to OpSec our or affirmed see surprised the use our response it's because on is their That's not top micro-optics differentiated that customer question. That's what was thanks, think going technology and physical answer wonderful of a your I we've that been and channel -- with our base strategy customers actually It Bob. because holograms good but our affirmation portfolio bringing the their along technology very that that. on from can got software of completing of in and truly

with didn't share see I can where not logos, the we for of in for offerings new our synergies move necessarily just are can expansion that who we this off of the of wallet technology by we and before, see expansion they new So now access mentioned them willing but technology folks do inside OpSec the 'XX do of commercial through customers, all our them, And the up million OpSec the past. that's the have $X stack to channel. to things as

on those delivering good, feels that And and very so synergies. confident we're very

earlier. I the the that as and then with solutions, complete more think are in those OpSec That's your of market for And new part opportunities set broad that consumer sports and that's logo expansions. government. all point, we the fact around market, And of referred media there are pharmaceutical I has to the think to now segments a of

million $X synergies, side business. is think of just wouldn't last both. bit a of quarter, to the of we share I to of the I want expansion from it mentioned we weight built of But it one other. again, this as So in wallet

they're out combination. close. weeks good very up gone to to detailed through with we've as about plan that now going customers, we've closed, excited and about final leading the we're our XXX-day feel a So the that our of And since very

with comes Next UBS. from Damian question Karas

of a going of kind us color market you what's the little gaming gave there. and on on So bit

expectation the talked You outside growth sort about of of CPI of your for rest mid-single-digit Gaming.

So could part color any kind the of of just wondering across additional walking maybe is us progressing? of if business what you're seeing with how those share each you verticals, kind and

to Yes. I question Matt's Damian. and we growing what performed with that -- last Appreciate geography, healthy. question. business Gaming, market back think with at is Thanks, said go that what first to think of here bit the quarter. We expected little unchanged. said we When we I'll consistent as see single again, a the has digit very low about and on underlying that's mid-single digits just depending

gives And a through of we year. so lot us as that confidence go this

again, through maintaining our our in strong share based we're on market. that's, differentiated technology. the Also, checks, the And own

So to they're fully levels that that casino that's backlog nothing still customer a replacement through is normal indicated are and understand driven perspective. be demand. the would was order rates run start again, as come expect drawing of normally as cycles to our driven in sitting. where the There's driving Christina we to expected the there quarter floor down we back last gaming, CPI we business, inventories The in see then as to and months we rate playing upgrades few going by seeing by we're expected, out changed And showed for order the Gaming from well. QX. the pattern as down, drawn as that And

to changes any that. see don't we again, And

the what verticals Gaming parts this just seeing of we When year. of confident line other rest the discussed growing So quarter. I is of see their your expected as playing we're I'm about healthy. we're again, particularly would year. the start just with the in for To market, out say retailers for and is the I'd to encouraged mid-single other digits the The ahead rest in CPI, moving question say by retail, all last year major for of upgrades. end going we think underlying as you the I self-checkout We're on

unchanged. that and these scarcity increased we are trends aligned And it's of again, automation labor think secular to

performance And well. customers Retail customs our line digits from this is so and year mid-single from to year, see track both we our for as expectations, on segment applications OEM coming with grow and good our the self-checkout in

I'll mid-single again, seen year one the particularly digits, for as that And at finally, with, then ], year. we've and strong we vending just just that continued And is strength area fashion, the [ last vertical expect vending rest pandemic expected. business is since end the which in growing this of the growing finished

of again, robust normalization I inventory alluded to the gaming. kind So resiliency a nice the around that business, understanding

that Damian? helps. hopefully, So

lighter anything the Yes. little It else? just we carrying might No, very just to and a might of bit be business understand inventory. helpful, or cash that, Aaron. capital free and related Or you be year Is it the more Could side This the Christina. more flow like how should and kind free cash progresses? working U.S. flow little Currency looks for on may kind little clarify a you're like bit maybe us working help shutdown question bit of in a think quarter seems the that's why capital perhaps -- what about be driving as that?

our leverage, our we pay to M&A. in year, in and down million while think free cash $XXX about were just appreciate free strong overall, year. you than When such we have tremendous example, invest able to And cash flow take to generation. as we a step that continue enables low an strategic that to loan us organic Thanks. Yes. in back, term less question. flow and growth maintain I one last our And of

strength our shows of just free flow. that cash So the

QX, business, lumpy you capital. as for is shipments, quarter-over-quarter working know, orders and to specific Now lower And that further that working free the cash saw of be provide can currency capital to of on which cash timing the a our we context Currency used flow impacts timing based impacts and on a and business. project-based

Aaron investments about higher for in had spoke which tremendous opportunity earlier, also CapEx which new in We series, a growth is business. the long-term the

So those excited make to we're now. investments so

free cash XXX% currency quarter And you strong timing. quarter. you just look flow flow very in on think really approximately at cash full expect to about the on side, overall trends in in free also track when had CPI QX, a And I'll at the and be the say when the conversion. we So margins we that's the year,

this So be QX really quarters. the tends seasonality currency of as of a was specific little and to bit the lowest to

Our Capital Brooks Markets. with next Bobby comes from Northland question

So you opportunities you of via the seeing one, seeing excited maybe duplicate things or over maybe time invest spur next XX-month more growth? OpSec nature? into further thinking cost to OpSec about more associated the are Are you to expenses for opportunities of spending frame. are synergies or elimination more and Or guys that

thanks Bobby, Well, little think to question. again, it's both, for be I a of honest. bit the

that's at looking were channel. me the about start our of $X it million synergies commercial $X I sight talked at about coming said way the OpSec we, to have million in we synergies, we've those about modeling, the I of through and have and through our business. driving synergies line and due the where really of of Let with in And from earlier, diligence and XXXX. micro-optic by technology least that think sales our

we'll to operating CBS chain, that The discipline. $X apply operational the from is million with bring other the remaining our we synergies, scale really and about rigor OpSec that supply that think with

plan that, synergies to Again, well with as So the our and about million doing a thesis. that out happening as our deploying going principles. part detailed confident facilities going and very Day training operating integration feel is CBS into getting it. is to on and very the X that $X commercial which drive our We will we're of include customers, work to immediately at

synergies. Again, feel those confident very on achieving

the there the in point about, to growth is business. Now are there and more investment you've opportunities OpSec additional in raised

business through, technology, just chart slide only where OpSec in that with physical again, the before. very pie in excited. the was outlook what digit frankly, but shown that's business in feel, We remember, on to continue communicated term. of we've plus see we're in quite already long the we're at And business, making I that I building mid-single growing but the their that's a assets. think as for good both have the out this term I went business, not that's they OpSec digital portion make And confident and investments the to going near

in see ownership OpSec I and moats, historically wide digital. continuing create line in continued to through So they've both been technology PE investing physical, where their with investment that's and

both. technology for a of growing NXT. well, the and and is OpSec as part it's as for about So is it's story us and of of Crane think growth, much growth us of it's bigger theirs, our bit TAM up a the as market I opened do about growth little with But combined

in about then a Christina, quarter fourth XXX% know the maintaining saw XXX% Appreciate on that of you 'XX and more would cash through the guys kind maintaining just Could Got free confidence you maybe to cash just conversion to go visibility and you and little that with -- back that that the just maybe maybe color color. the kind and be towards talked rather back it. quarter more And guys saw maybe -- flow the to adjusted conversion in a 'XX. just depth extrapolate free have because you XXX% flow going free bit third cash than that guide of flow the what you she I the in go that. more adjusted free of would on

confidence guess, just and more looking from. where kind stems kind of of towards visibility and that So that

follow-up bit with And higher. quarter. in quarter, be to QX, happened When gradually, Thanks, on the you seasonality what to of little question think Yes. that. prior business Bobby, a the of the be each about that's we tends consistent years. QX for lowest And there. operations the in expect

normal quite it's happening the see -- that year. that's to throughout escalation So

this and just on to investments U.S. quarter, had to in we also new just the of in temporary International the in shipments related that our business. specific some Now the the QX series were on timing just Currency QX, also delivery things and U.S. happening to related

look So those timing. of our XXX%. full be as we at to projections, little a full year And that track expect for year, bit do are we approximately on

next comes Isaac Oppenheimer. Sellhausen with question our from And [Operator Instructions]

the there? upgrades? internationally customers are This touch anticipate there? on at time been very seeing have all facilities to the have investment you already, is see Isaac, but equipment helpful upgrades your equipped Could the is Ian. serve line it Currency. that of to do required you to for for business level of growth on answered Or And those the international maybe Most similar was maybe

the you can just your what I you half Isaac I'm ask repeat just question? said. sorry, Yes. follow I to first of didn't

Yes.

be investments on there required or in currency facilities the anticipate just you upgraded internationally? investment Just terms equipment do you maybe, of other upgrades, could of the any downtime the have touch on and to level

clarification. the for thanks and that, for Thanks Yes.

CapEx terms year, expected. series new So in see I such program the long-term than we're is, mean, growth we've for investment this company about. that a higher so this in the of making bit the again, excited is tremendous be year little historically which a CapEx we're for U.S. We'll

of around a X%. will sales, now be generally, So X% and little closer CapEx to bit it

investment will So off new very decade-long this -- this for bring not And a to change us that specific will still but the the the significant, business project. pay over in that us. series problem cycle to

continuous doing continuously Our are facilities, our initiatives ongoing. are across maintenance improvement We all right?

in you'll that's not today sales forecasting. U.S. so of see specific the And of in there's like year, normal CapEx nothing the series Certainly, internationally. doing X% approximately anything what we're that magnitude we're happening every again,

Our next with from Matt D.A. Summerville comes question Davidson.

it sort given next isn't front-end It other same combat see world, government we it's the what do you that cycle? migration the This when heightened with don't And you more redesign expect decade? works U.S. see the with? to loaded with central you government extended it down in Does that follow-up. relative the think into Does cycle, -- these how inflection? is quick to maybe deal U.S. upgrades. it to a major not, a denomination coincidental Are trying it playbook government? the banks with to right? of you down if central starting run [ Just the XX I banks cycle. other Is U.S. see with migration an to start happen level the the denomination ] Obviously, they're

Matt. question, that for Thanks

up the you're that $XXX is anti-counterfeiting little introduction market, good U.S. today U.S. bill anti-counterfeiting set the or and as across this the know strong bill lower think XXXX, the denominations of demand framing bill, we're micro-optics I you for denomination anti-counterfeiting of let's and zoom way starts $XX technology a very is U.S. what higher as off just is to the bit exactly go the to and the history if as program, of right. say concern still big denominations world. allude some seeing with regardless are to that. If back you the it it's increased obviously, risk. moves will, down And and The here, examples $XX have unchanged on of and that because the fundamentally, I

win, seeing question are year, the other the And our for exactly think outlined. a we you XX reinforced that's other arguably, is micro-optics, to wins which to -- at QX seeing we're start and I was question. strong your So of by denominations your us phenomena consistently very the a XX

more adopting banks happening I what's increase playing what's is central every banks are big world. denomination which would that anti-counterfeiting in And think denomination several happening say will by around bill new consistent in that's That's a I States years. in for philosophy the United redesign. playing So out. the to that's benefit in a been phenomenon us. It's out central way, it's And the technology

that these will remember redesign deliberate are processes very process. often. slower typically central that banks just very not bills Now That's

the only redesign but to the takes of go the number through it full process. so years also a not fleet denominations And of

adopt the our Matt, you So people virtuous lot it playing to advantages accustomed us the Currency out see that specifically, to our again, and advantages has technology, its think that I continual think see they for we, cycle plays it, as this that get more and in a numbers. tailwinds understand to you technology, of that's increase a really business,

from last Markets. Bobby our comes Northland Brooks Capital with question And

So revenues all cross-selling of OpSec that notable technology the boost guys' notable I'm technology. switched right to and in trying just piece. margins? OpSec the customers, to hologram micro-optics micro-optics. Obviously, assume myself. let's What better micro-optics frame say, pieces a terms an going authentication then, help for to OpSec good OpSec, opportunity? I physical it in physical really just a on And back of would into step-up trying But durability your has Just his is that authentication over frame -- to expand drive customer that to am

of truly can properties both that's factors it really of technology really what There's particularly provide certain would and with a hologram talking the Yes. durable. of your and other. feature OpSec for can one about for the you're from -- many argue No, little at, of customers grades are different the it it's the that that's view over function. good set very end dependent really it There perspective, I that micro-optics But if provide can't. of question, micro-optics, They're viewing -- aesthetic that's of that. I as solutions different aesthetics. on portfolio Thanks at form looking Bobby. a terrific we and features primary true are a a that would high products. it's we're anti-counterfeiting at not what least type

a color looking are the label anti-counterfeiting, to It's customers it different of fit make features a they're could very weigh of that for. most a just going So decision. be the to variety not format

for very image. competitor going and to OpSec take and the It's a product on portfolio forward. customer. their now in their this they their the other fact, think that will differentiation depending and think right in of probably we that's it's always answer the I that's broad brand migration is to combination depending market, for micro-optics, having have can want So a no brand most or offer the where the both And not what customers, few, moat

ways. of bit both it's of best some again, little a worlds the So in

frankly. answer both the are but very to margins as is physical OpSec's net-net quite accretive more on your margins, question both micro-optics, our are On And good, the micro-optics. on robust it's very basis, a

like back Aaron call now closing over Saak turn to remarks. would to the I any for

Crane be operator. this Thank again, came a And I very for acquisition history NXT questions this important is, quarter, much, to out this week couldn't completed for NXT earlier adding by how you in reflected this our we our the in of here as that first morning it's the right. this in more major OpSec Crane milestone of portfolio. the acquisition excited announcement of and All

all our that of XX dedication while closing and focus it the QX, first has an all just rewarding. And associates for thank to been very company. NXT it's our I business, efforts their to was the like full first And in think, our ago we world again months the I'd around hard acquisition. just launched to outstanding believe year,

the excited by say, XXXX. to Needless I am journey forward, I ahead as look in

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

This concludes participation. the conference. your Thank you. for Thank you

disconnect. now may You