Crane NXT (CXT) 7 Nov 242024 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Crane NXT Q3 2024 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Christina Cristiano, CFO. Please go ahead.

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

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

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

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

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

is provide President will discuss today Saak, transactions. we financial operational and me our QX on morning, Executive and recent performance and Officer. our M&A this our Aaron With commentary On call Chief

for will We guidance. After we our will on call open XXXX the provide to remarks, prepared also our an analysts questions. update

to let Now Aaron. call turn me the over

Thank call I quarter you, Christina, third appreciate and good the discuss to morning. our everyone joining results.

many events. know that particularly As by we I begin, challenges. I'd are the other like moment through to were those impacted those global hurricanes to our associates, still take acknowledge a recent working and associates

for align matter. NXT the like these. of thank core teams and and a my you priority extend which our always their one day, gratitude colleagues an families our ensuring but and world to safe, job people to times associates is Also, all that hard that and in Our were every efforts our values like I work especially did big excellent around with their would

strategy execute to few portfolio our grow we secure, NXT of have continue very that and technology our for been as Well, authenticate. the busy solutions diversify months last to and detect

X acquisitions. announced Specifically, we

integrate third quarter. we We strong to and results successfully delivered continue OpSec, in the

our with Starting results.

line Our the third increased prior was expectations. quarter $XXX Sales performance over with approximately XX% our year, in million. reaching versus

adjusted was core OpSec, sales X% growth with approximately of $X.XX. EPS Excluding

we transactions quarter In will De technologies market-leading expanding acquire Rue the that drive secure, we are also several detect include Solutions announcements Smart to exciting M&A announcements are addition, Authentication had of authenticate. examples business growth that in of value. Tag's how great shareholder technology. and this Both future and portfolio and Packaging Tru our These our La

OpSec also months this It's with we in and about we continue into are expectations. X process track since is We Business the processes utilizing System. integrate back-office to operational Crane the OpSec been acquisition, and manufacturing and on our already driving closed our improvements business, on

actively engaged customers response Additionally, very we offer, with be we we're expand portfolio positive. and the as continues the our technologies of authentication to

Relations a can of find And ESG website. appreciative important step and area. of the I public this In section encourage sustainability teams an journey work progress quarter, the a meaningful the our our across to in in NXT ESG in you which This we philanthropy, you very highlights also I NXT report, of to from our drive governance commitment to our the report. values. This new take all Crane to anchored our first the in am moment and company, Investor published report good third is as read

Aleta leading I and to the sites company. welcome Authentication the Sam diversify the Aleta Richards again is team and Technologies our and the and add who road welcome also the on of operational we I'd to her talent busy like Crane to we President segment. as the portfolio drive remain Keayes, NXT team. our ahead excited opportunities to enthusiasm It execution, now about Crane that Currency, she to Finally, and once brings reporting is our was visiting and leadership continue quarter, customers, as a Security to

X. acquire Solutions, De billion market. in to authentication expanding we aligns growing Turning technologies. October, Rue signed leadership strategy global our a physical In leading authentication of definitive Slide a This and with to well agreement Authentication our digital the transaction provider La $X of

As goes strategic to market X this on a shown De with La as Rue Authentication reminder, platforms, slide.

link revenues. tax goods physical and of identifiers full digital provides to enabling collect solutions enable revenue that tax products, to unique stamp government traceability First, technologies that the governments

polycarbonate government-issued secure identity security the including solutions with products identification embedded individuals, documents pages of provides passport Second, to features. security

provide protection and insights supply data combined consumer highly the physical trace critical chain products products software to Finally, secure track through through provide analytics. owners and brand with labels brand serialized, to

high OpSec, revenue the comprised has provide year a to of security acquisition and a protection Authentication De summary, Rue La of De this recurring financial relationships year-over-year. In advanced long-standing our revenue percentage ID on acquisition growing growth Like reoccurring generating Authentication OpSec an of of base, builds and attractive documents, mid-single-digit tax Rue and La revenue, and profile and earlier stamps customer labels. digital stable for

Turning to Slide X.

markets. We utilizes can of owners on Smart of authentication on that by a which This transparent to products. a the a authenticated. a directly product, their consumers also technology be authenticity proprietary, using recently consumer app, proprietary end patented coating enhances technology, the brand the the the industrial ideal acquisition and smartphone Tru both be surface in a making it ability of Once Tag's can Packaging label instantly announced or scanned and assure article for of applied

is a and to secular our and This synergies our which having clear commercial and serialization represents and value our with linked natural also on first approach with customers. disciplined provides portfolio Packaging solutions when to companies differentiated fit innovative path our is tailwinds, to focusing provide Tru markets ability differentiated track-and-trace technologies Tag's OpSec creation. drive to to our M&A, expansion It with exciting capabilities. identifying will software, further to a and enhances Smart an technology offerings

the expect year a high Tag acquisition Packaging X. by to We double-digit Smart Tru deliver ROIC

of recent Tag are aligned build the La strategy steps of in acquisition resilient a execution of our and acquisition secular year, portfolio tailwinds. to acquisition clear Solutions and the the De Tru The Authentication NXT grow forward of Rue with in OpSec the Technology earlier planned

We continue to explore our remains diversify business, M&A additional healthy. funnel opportunities our and to very

as the our our updates detail With operational that, call to XXXX as financial hand to more guidance. well and Christina? third now let me to Christina provide on performance over quarter

again. our strong continued Thank you, morning of I Aaron, would associates and execution for to global their quarter. Aaron's appreciation good echo like this

was delivered as line in driven quarter free expectations. the XX% with international margin year-over-year growth, year-over-year. was results that skewed quarter quarter Adjusted approximately we with segment and of reflects XX% the third OpSec X%, continued by sales Sales X, flow approximately requirements excludes capital product Starting unfavorable end. OpSec dilution our on XX% Slide nearly were acquisition Adjusted cash operating working by timing from which conversion end which of our approximately of Aaron grew mix and and shipments, the increased at impacted currency. mentioned, an of the toward core

EPS Finally, of $X.XX. we adjusted achieved

driven gaming. mid-single-digit sales productivity Moving quarter, disciplined in margin segments. growth XX%, reflecting of grew Adjusted of third basis CBS. growth markets segment core to by outside year-over-year pricing CPI X.X% execution across initiatives operating to XXX reflecting and points our all end reported approximately the

CPI the customers. expected are performed accelerated markets, Looking anticipated, pushouts across OEM other from rates have the growth to our gaming end order markets and performing year-over-year. as while full continue we gaming, digits. in for revenue of in be driven as mid-single our not the in by quarter, our revenue we to expect as Outside expect approximately end non-gaming total, year QX to be anticipated, verticals flat In

Sales XX%, currency. operating the as Technologies planned. by currency Adjusted including OpSec, Security Slide sales on was margin international the and XX% and Moving Core up quarter, executing an dilution which in over mix approximately grew OpSec shipments. higher segment XX%, X. to reflecting from Authentication were in unfavorable acquisition driven is

over have currency up We backlog, very year-over-year, approximately healthy continue with XX% a to up XX%.

projections for the high segment. full position, this confidence our in we have year Given very revenue

to exciting partner but they had on designed, the Currency, the Crane Bank banknotes, micro-optics new each continues the technology, will in guilder, of their Caribbean beautifully Curaçao are SAT. we launch differentiated in the world quarter, X Maarten the In banknotes which Sint released across and third public the win to developments with leading During and March the of Centrale first XXXX. we be to several pleased series are notes share Not with technology which Crane on the were banknote. feature to features only

the very this with are Bank proud Central partner important milestone. We on to

software and OpSec product accurately this will track quarter, enthusiastic authenticated RFID to articles. sports on-field league allow sporting with and secure authentication is tags with technology embedded exciting pilot highly items OpSec, we major for began to trace of these by new and a This more implement consumers. potential where our a we a leagues. about offering, an supply other application its with will This are program At sought-after game-worn to be extension

$XX balance of Moving XX. of sheet our leverage We to in with quarter, outstanding the X.Xx. on Slide approximately million approximately repaid debt ending net

investing be us half in allows maintaining debt flexibility we cash Solutions dividend on the in paying estimate competitive net Rue close deploy capital XXXX, to and After to paying flow a free anticipated for focus ratio organic Authentication of strong Our to will the growth, continue generation our of X.Xx. approximately while M&A. strategic acquisition leverage future De first La the down of

Slide XXXX to XX. on guidance Turning our

in sales by are market growth offset based backlog strong X% of narrowing CPI. guidance currency on from the plus X% our our and performance gaming plus end We OpSec, to in headwinds range to

collections to the from than full guidance which are which our free QX, XXXX. in are $X.XX we approximately by continued XX%, that be with certain at to to in timing cash will in conversion shipments $X.XX happen a flow lowering comes margin. shipments, guidance currency adjusted in EPS higher Considering now later expected $X.XX, growth adjusted currency headwinds on our gaming, reflecting of to these early $X.XX given softness more Additionally, mixed are we international year narrowing offset to

by orders, Reserve the wanted I XXXX U.S. to on new U.S. Federal currency the the given Finally, on expected currency provide their update recent an announcement program.

years a you its ending in bill launch release the XXXX. X of note new many know, the the thereafter, by of banknote with U.S. currency XXXX, release followed redesigning is of the a $XX with for scheduled As every $XXX redesigned process of the new in

the bill XXX and the the supplier of remain blue redesigning for As the currency utilizing its of we with in features our currency, late of U.S. years on market-leading, We we early confident announcement relationship will $XX countries the notes. the anti-counterfeiting of the look government. paper U.S. forward to anticipate or the in new the micro-optic continue that specifics Like the all XXXX sole leadership almost positive their the U.S. bill, public XXXX. strip current in in $XXX design supplier new very on

at As for upgrading the discussed are on step certain facility calls, which preparations XXXX, in through in QX the earnings U.S. QX equipment prior is XXXX. Massachusetts represents in project our our Dalton, will banknotes. This and papermaking new final extend track we

Federal would denominations. be skewed in XXXX order, indicated Additionally, XX% published down be which that would approximately print toward its the lower late September, mix year-over-year volume and Reserve that the

As set Reserve. a at reminder, Federal of volumes order the the entirely discretion are

to of Engraving The essential production and the allocate the normalization projects, Bureau and including reduction new inventory shared to of attributed to post-COVID commitment of Printing the was in the volumes capacity banknote demand and series. Fed

double volume expect orders. digits Fed's decline for result, to As in we XXXX, the anticipated consistent U.S. a with currency

growth We about by for from Crane prospects the government. long-term remain undertaken significant Currency U.S. program highly this confident the

BEP new very the the the and proud partner the this XXXX. are with to launch $XX on and Fed to forward of look bill journey in We

well updates year call. We providing full on earnings detail will as in XXXX program more our U.S. be during guidance as currency QX our additional the

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

Christina. QX been very In the you, NXT Thank busy Crane closing, has team. for

execute continue our We to strategy.

our a most building business that on focused assets. valuable authenticate and detect We customers' are secure, resilient market-leading technologies

in sales of delivering X%. well growth sales QX, Our executed approximately core and double-digit team growth

as and we shareholder a to framework productivity to also improve we M&A, positions continue expansion. this growing continue creation. continue margin utilize to am I utilizing to We in markets. will capital to value execute significant see build upon deploy strategy, our And that drive CBS confident we market-leading to disciplined

all this time your I around thank our like their stakeholders. for for And to also ready our take of our associates we're operator, again and customers, world you to commitment and the communities our morning, Thank our question. first to would now

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

the for we if CPI about Christina, maybe talk Aaron, first Maybe, can question.

how of around the should, the number one? with in verticals respect more bit gaming, sort go-forward cadence be thinking at we talk changed a a little detail Let's in to XXXX. level, about for high What

of two, growing collection think it that number of digits. follow-up. And want to to reined of in a may generally because picture, big a that in inclusive I to at businesses make I then then kind a about what's be just And mid-single me sure we like I year And these happening need are of again, sounds bit price gaming, next but have understand little fully. capture

Yes. verticals Thanks this in services, for year, in at Matt. expected, going discussed look and we digits. at those remarks, Well, we retail this as year prepared that, performing to the CPI financial we're certainly, mid-single end as vending, growing as

position, where end start that the leadership have And me market. think with with unique comes first margins. high market For healthy is we again, and a gaming, this very a we let

about we rates some slower than then we And hand quarter. And of this than last on partners inventory, What that QX expected. that business. was are we've like they're lower pre-COVID. OEM as remember that what we shoots, in consuming but as to lower were expected, So we're QX moving after levels was is seen in really really we order talked you our is inventory what green seeing

they're So times very is well, chain to for working now to the And same gaming X X supply time, capital. lead about weeks actually, their our performing have and They're at improved. components. significantly down our improving

end what the this flat your giving for we've be rest how is fourth slower growing a for we revenue of And anticipated. or to we've We here, continue QX. we the in adjusted originally about XXXX of markets the put the those and question, both approximately the CPI to think rest again, So but year-over-year. -- when verticals total now and year, you quarter with forecast in improve, what's next market expect together, that the X expect orders And us we done to pace at growth. ending QX mid-single-digit to than

to on just may about is mentioned business. talking is I And little the How should just I down have then, more follow-up, thinking as than USG be a going going be you down a -- revenue we micro-optic currency bit to -- say, double Aaron, Revenue given you're be about volume, mix. that, know should headwind digits. that

you that SAT I'm this understand So organically I have to And XXXX? backlog enough is in currency, to growth doing sustain you mitigate guess huge, trying business are what kind that impact? respectable of international-driven to the for in

Yes. Thanks, Matt.

that Christina framing the volumes just simply you're on based think I order be as The correctly. USD, rate. down, will digits, Fed double the up mentioned

we And in core international and start that's that course, backlog will in offset and again, into now We come how the to Now and May then, of feel currency. in business very to be business. strong segment, growth fantastic the about is performing. going have lap that in OpSec by, that

well. XXXX, U.S. when we and flat on come we're guidepost revenue quarter. in synergies. some for total, obviously currency continue are execute of add of I you the cost going look take which Those can about see portfolio, in the And the productivity I look headwind here, in at And going to very when in rest CBS, at action in driving think the this going the think to and is from to I think So the you through CPI performance OpSec we're you NXT XXXX. for

the mix, see to headwinds in the indicated. as would year, dilution saw from OpSec I you from the that same U.S. that the So this segment-adjusted operating government 'XX expect have we'll range we margins offsetting and

that sure are guidepost SAT? I'm organic interpreting total I That statement flat 'XX? Or talking Aaron, again, just Is that for want the to NXT flat, overall, just Crane you for make about correctly. on in

Yes. Thanks, Matt.

we'll lot Crane our be guidance flat, to talking in course, Just process, in QX approximately And company planning of about that have clear, earnings on I call. middle and of during 'XX. revenue a our total fidelity am we're the more NXT flat

Halloran question comes Mike with next Baird. Our from

La question like numbers Just flat there that's talk about part time to run overall? Does you on of follow the include not yet acquisition De up that Matt's when again. Rue the rate last one necessarily

include Rue Yes. we thing just think, De guidance it De And right course, La closes. officially the assume No, from Mike, out here, will it until does then, update of no contribution of, Rue. doing would not I La correspondingly. And we

Yes.

and plays 'XX impact year on perspective or Just making at that comes -- where ultimately becomes up and following process that that again depressed, overall is In a the a a And then business. the then for 'XX Is are thinking the other from the a point? in. lot more you it makes logic just normalized U.S.-based of for sense, this -- And about the thought business currency content how $XX normalized? sure. then more 'XX for then essentially how the out variability words, U.S.-based

Yes, yes, I thanks, think -- Mike.

think generally I correct. that's

I actual look of for release the date $XX. think is the what we'll

the business. still us with replace and tailwind the it, content I feel will new it's the for stop we which, about earlier and incumbent we a that better And again, as here. technology on of think the effectively higher the believe bill supply released, unknown to that's will it have the positive $XX current issue, confident it's The that.

improved in U.S. normalization a I creates So with that revenue business glide of margins time. as the over and the release upside the $XX the think to timing of you 'XX, really it's in natural said, of the path

of to just the side give guys? last you the mix one that you Or you for side. pretty about on lows context things. mix is currency maybe that that of close some for in context then And terms and think historical put in U.S.-based it 'XX normalization and related When this on business,

for much very the us. lows it's near Yes,

look you it's of COVID mix of kind early you to the and lower the was during a out to the lot the and zoom would And at get if higher and denominations. look take $XXs you of production the just let's skewed If you on you midpoint, years the reversion say, a heavily mean bills XXXX, through $XXX there COVID. where mix at

So traditional is revert of to would The $XXs exactly lower versus $XXs of of expect time and correct. mean kind that, $XXXs and forward. normal, a you're and volume that over mix order we a going back

CJS Securities. Bob Our with next Labick question comes from

exciting give the So markets yes, of breakdown De Rue in think you side, your on forma could announcements primary was your us, the Rue? about end the focused? pro you the markets authentication La a And forma De a of wondering, be lot I so should obviously, quarter. we be sales will And how over will La assets? end Where pro

Yes. That's fantastic.

question, a Bob. Thanks -- So that. and great for

again, about have De segments for position leadership La we end the have -- it, will or Rue. X, these be tax XX% Government government So that's Then a markets us. ID for create and really business documents. primarily, be will of stamps and call we

in So civil then or going creates And think in result in. CPG-type about it, balance. think to very remainder, a the strong that passports, of to which sports of have the XX% position so the ID effectively government business. XX% ID that's we're polycarbonate the consumer brands, exposure business, think And call be more companies, of again, protection that's will brand of the pages passports, to excited leagues,

NXT. in adds security is we also That OpSec, of So like lot segments. to really when And diversification markets secular of what in a of growth it Crane all those with resiliency this we kind aligns to where features of X the together see that the to tailwinds you here end portfolio. add

about how target the step pharma, and And you you end have the build into in in still And to you about, then SAT? it you've of I think that think Great. much targeting, do past do end each should Okay. markets like is buy? next organically? grow authentication larger about talked the stuff? how Or kind as a continuing now in going to are versus something then scale and you what Or growing market scale, you're guess, other buying --

Yes.

I think really good a really, question, that's Bob.

we at with authentication, set and least thesis half close particularly coming OpSec into properties now post that created the Rue get with next very we've a agree second and So think anchor your together. De property La as I inside of of year when strong of you

I of expecting very that like very and become announced that's that off like add can right? that this a the we to technologies, see I We funnel you X. high coming. act strategy. a of core, year off more line Tru we're healthy good really of just utilize add of now keep could ROICs think build, Tag, today think extensions by get Tru We product technologies we in and And with strong building that we as off accelerators in, technologies like Tag, business. core And our returns that that channel, that we we with double-digit for have

exactly you're one there's pharma around right not broadly. markets, for that's and on That's right. area think that that X or possibilities not really discussed. X health for If and in are of those space, strength I where us markets is explore interesting I properties to a There one us some care now. there's more

prosecuting opportunities. very And an us we're for in so that's, some M&A funnel, healthy and again, that's

about as geographies of the markets, can think I you also well. end think outside

those Rue very markets. and OpSec us growing North and give in to exposure, end De And for that's Asia. America expand another geography where La secular nice into So and tailwinds exposure further Crane in in have NXT and particularly demographics Europe you

thinking that's in feel So how very we're funnel. Bob, and the it, about confident

comes Our from next with UBS. question Damian Karas

think margins to in you hinted at I now. holding compared are XXXX they where similar currency at Aaron, levels

that currency is. profitable given factors I play think and feat U.S. business pretty be mix that would a impressive just at the how

cost just more Or like of you're be that like and dilution U.S.? the going a is some expansion able would expecting -- you to international in is it to the could out little actions for is you you're offsetting bit? U.S. the bit? the side, the taking Like is us maybe both the to margins? going comparable help case kind just a be little of like to elaborate quantify So And international

Damian. And specific I guidance, our a little was Christina to was year. as in me Yes. That segment XX% between margins for referring helpful. year, was adjusted for more total get and Thanks, updated, for next What NXT this let XX%. to be

going the range in year, of year. team is synergies, OpSec you that that I'm a And and of what's in productivity that proud very in CBS, of CPI; and in the be again to the that, execution occurring I next combination how actions, particularly have our executed we see again, clear the sight we're think this has which to. are on track of line drive

I think a CPI in to be specifics the by there'll there be the your offset the in segment, segment headwind segment. you of goodness -- will as some SAT probably question, into the little get level,

that's specifics we year. XXXX think on the give of hold until we'll end rest I early out our year, in we rolling of we to NXT, Damian, I'd through total next here, progress of for same as in here courtesy guidance range. where, about the actions out will any off portfolio into related the the as like be to those though, those

Understood. not have the kind of like annualized just of thinking here. year you Tru about How recognize an an Tag. about we said to be going financial could should Maybe it's end basis? I on impact modeling impact much you of on I the ask the

certainly us and on we're can a more I we to building portfolio this for model. adjustment make would to utilizes that's differentiated or to incrementally Yes. how of our advise technologies signal not of a find really and make channel. material truly the add Damian, It's it's

million the years. For few over of us, be it's going sales few to dollars next a

going to that start-ups channel. our very bringing with growth total small and utilizing in partnering to as able now we're authentication approach, and them disciplined leader and driver companies in returns think de technologies good NXT, I largely it's again, find being and shows, And in and we're the a this it's industry, on being in OpSec business. again, So a in to in minimis generate but like our very

We have -- opportunities are healthy this. funnel of we a other like

really last one, could. That's it. I Got it. one Got And helpful. if

a last positive going you normalization quarter. gaming bit discussion, to Just back little the did more the orders sound on

maybe I'm maybe now and second just talk the kind a of reason, for these curious just correction that end from you if some a of quarter, the that's So you're up. of And Could a third at little what kind seeing customers? here kind the pull-forward tick more on seeing quarter, where some of gaming light you bit whatever of kind then and saw little inventory foresee you like that pushouts. bit of tunnel demand your OEM on of were

Damian. Thanks, Yes.

And that we with be you're We some as probably just think orders the go as I forward. X in framing into prudent putting that's right. want not did of within to or that that we in QX, was here repeat did very QX. at and where see forecast our green some OEMs shoots X that level we got

back the healthy. the go that fact to I markets are end

at have when We We strong here turns us shorter, being and margins for inventory are very the as holding see it's OEMs leadership a to going position to be in for this now look of driving those at occurring. lead times we they and the strength drawdown business. inventory the probably our We think what proceed forward market, OEMs. the in lower those inventory are of

that's play expect out think that QX. And back we've we but going expected level to of would another it's So quarter I market exit why run XXXX. And get to to single-digit-type rates. or adjusted higher a we to growth as X in low take it's directionally, we think going as

Ian with from Zaffino question Oppenheimer. next Our comes

gaming in Ian. margins of of related to pricing balance on how a of outside margins you end for of Could for segment some bit then and are talk drive Sellhausen sort of the work backlog the taking Isaac despite about your on expectations And the there? helped mix that, you the price maybe the still there? is you shift you've question and maybe productivity markets as My through is This initiatives, CPI. some higher cost

Isaac. one, that Yes, I'll take

a And hold system opportunity -- executing a been lower to great as able it's job to they're congratulate volumes, margins. team the just really they've drive leveraging at productivity. to So great seen, who doing we've and despite our CBS just even

just it's really So excellent work CPI the by team. entire

We continue to be positive. price/cost

even able that's the execution there's and mix very unfavorable through a of because pricing a mostly pricing. offset just at of so just, in gaming that mix portfolio, been And we've higher productivity. been And again, though coming to disciplined

said, next So we if the positivity bit productivity. good, of Aaron And we'll levels to margin continue. year overall, related there to that as just there initiatives feeling through the really anything, could driving expect a little be be

conversion then on Understood. I adjustment the looking flow shipments year, any there? obviously the I out I And and major does currency currency consider similar other shipments. know on given mean, still or I mean, conversion but guess, year a factors have early, the free Okay. until for the next we it's should impact free separately, that cash cash flow

confidence free It's great ability question, nothing's to take our high the cash a have business that our and changed continue Yes. we to flow. Isaac. generate in I'll in model, strong to And opportunity emphasize

this anticipated. it's heavily visibility knew again the shipments and we certain our of of the towards of the play timing but certain and the than were half toward that's revenue of are end shipments, more quarter, weighted year year. This the timing greater we impacted -- shipments, specific later was back going the out We into by the to have now year,

working creating inefficiency. capital it's So

business, a long conversion be you total, over you for term, And look and we thinking some Now be that period XXX%. there variation. could the approximately time if is project-based quarter-to-quarter, longer in will know. But over a as at it currency, of expect a project this NXT is

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

I'd product the growth get color authentication. like some strategy on to for

as in guys, Technology through it's last -- opportunity OpSec And months, what wrote clear 'XX first I NXT. on you De had Rue's couple product the really for La guys acquisition the think I've several major smaller coming Tag of I and a half authentication see it week. Crane a now for you've Tru

getting pretty sizable there. you're to So a business

but single-digit-plus the do you'll the opportunities you drive know it, come? growth call you plus that think But businesses do you're high building, are combined able range, in the to think like portfolio you've where mid-single-digit these a acquired range? be rate to, growth I

And thanks, the about with this excited the integration going into point, exactly capital And we think deployment as your of be OpSec. of here segment. we anticipated couldn't Well, it's Bobby. to more

you to when new in think and prepared grow, to excited truly share-of-wallet exist protection their to that them our comes expansion did I the why have incorporating major attractive new your not in, and really Christina greenfield, prop point interesting with point to we're a new we're of for services before. and about opportunities offering of some we customers, back consumers, some about we're talked adding right? so where at and And value what where higher margins. it's in that offerings And up going remarks technologies and to brand would We're new

think at we the So is growing mid-single-digit market this plus.

And of We is of have to the to your of that. want are to in De part this in at not as course, point, time. integrating acquisitions. certainly, We Rue opportunity, the the outperform still portfolio process point really prudent La we an be

De incorporate leader being be the polycarbonate offerings on brings, are for these currency. to opportunities where add it's like in about. customers, then government Bob La tax asked when I And a you ID civil see leader in space question, with become markets, now we've we technology to capabilities done Brand in. government authentication us to? the a we into But in see as a add of our more exposed ID stamps, services where you In opportunities, you the where one and talked we exciting features our protection, to Rue production think what Christina really can every similar

secular that aligning and providing adding best-in-class we're we're to give and like portfolio opportunities tailwinds, technology, Tag Technologies us of in top grow. incremental on So things to we're the Tru that

your is think I thesis So right.

forward wallet with integrations you're And about I the of to kind all talk of and share move opportunities. hearing what X and us closing as the the areas greenfield those these offer expansion think of we going acquisitions. of that's keep

win the prepared and in season? about just really on-field then talk this sports about Christina And with could Or the -- season? first and it. is that a you came is for to software is throughout on that project also, a quarter items it little about? gave through that the just embedded for Just entire all league that. that hoping piggybacking RFID this deal color. just something that's on Could of OpSec. Got test maybe give those jerseys trace you run I'm -- through the track bit or more any then remarks color how That's game-worn good And maybe maybe professional how the that jersey

about if which really customers, you're customers, just to really but you that you end. their to with jerseys, is I'll in, that in speaking working se, they're want it's has with Yes, authentication new who Aaron, accurate OpSec game at way about And our timely. this associated -- And know entire cultivate was want is relationships what with that can you a new per with teams. and authenticate. although specifically start. in used case, where involved, in able was partnering great very where This to equipment sporting ideas, jerseys not merchandise to specific develop to sporting our jump just league and think And that's this and about would the and chime

with backs And to the on- even so now that RFID this we've accurate. and got it makes track up. movement database that off-field it And combining more

operating but this on the and use pilot, for now run And teams, expand will the very league that with so test opportunity a not to words, run, a potentially few this right be to right? we're other is also So really it's in we're just the into test a only with sporting So exciting. leagues. your excited just this

opportunity. So just a great really

that is just Yes, getting And Obviously, of me question M&A. the really for then guys goal Got long-term $X it. have on last mark. you exciting. to billion that

was M&A the you've year really is And piece. on I this expanding authentication so just the executed of just focused kind product --

be to does shift maybe curious, on it forward So M&A? continue Or is CPI just under focus the to I going the that going to banner? was businesses that fall would

all Why zoom we're when that take on growth one? that driven value. in capital around would Thanks, just I and is ensuring general Yes. Bobby. shareholder out creating it I I allocation strategy, our don't say

to why and you think and approach, disciplined a going that's De La have And OpSec that's want to I we with so continue. see Rue. And that

like we've highlighted here with technologies these generate these differentiated You and see bolt-on Tag, Tru opportunities a higher return.

And any know, remains And the what comes it's can both in quite line other point. you and not funnel just, areas, going It's across so that's and get you very change. as time the episodic authentication sometimes point at in to healthy, your to closed.

no really change. So

here drive the core. priorities Our drive the shareholders to for and value is invest

we then going You do long X see currency feel business that we're We we've to again. always to competitive dividend the said the that term. and on we've very X particularly since M&A. And pay to U.S. We're continue going in a separated confident, deals year. execute to done

I we year, going argue that. we And we've could exactly go keep to this we'll doing feel do. a pace I we year, as expect next And You X said this in good that deals to year. X 'XX, were X into about done on of very what

Davidson question Summerville next Our from is with & Co. D.A. Matt

When NXT, Crane first flat that high I big here. make apologize, I I is total question. One, That's to level, understand. picture, I want I'm something sure feel sales said but my Aaron, for you missing organic? like

Yes.

be contribution full next would OpSec assuming, of year going a that So year Matt, forward.

for and La does of for So CPI not It and that's year course, the next Rue Authentication. currency OpSec all in include De businesses. anything

Okay.

-- the includes the of So of months worth year contribution X OpEx. from the first first that

included that comment. that's -- is guess... sales that so I flat in So

Correct. That's...

me disconnect of year in drag that CPI Can is try currency than is kind thought. some be Aaron. little my with even on There's and then, piece going bit? Either a have misaligned to the I would next or thinking bigger together for something you help

Yes.

point U.S., expect we to on currency the in your declines the due to those U.S. So

very And We we growth start exit look headwinds CPI, digits seeing at gaming those with just international combined. back mid-single-digit the that business, digit, out to your OpSec of in type model. strong low at triangulate mid-single we we're and plus when growing single Matt, in discussed, XXXX. then, in coming year we're the and expect as then expecting Hopefully,

UBS. with from comes Karas Damian question final Our

did chances that Just sound following Aaron, and this up you I'd to say, $XX going positive micro-optics. here. positive include on very is the redesign increasingly

without So about Obviously, details with upside U.S. there it? exactly great for to opportunity But simple the what way in versus the is think $XX hear. these bills. on the a is devil on government decides the that's that note to micro-optics

Yes.

about be and do premature our me clear, and confident far we presumptive in would that. feel any to specifics of be very more talk Damian, It to Just on relationship.

assume And around the can creation $X year to cost for XXX due that from the of It cost public value terms think current That's a at goods you and the the costs between USD counterfeiting if of safely the those of look delta features. $X.XX. terms information. about you are little so it's $X.XX depends look In difference, the at technology bit, the Reserve. bill, security about that's bill, change, the $X.XX. data the When they to features, way you that's but lowest in Federal the on publish, about

cost the certainly, will you Hopefully, as the feel very it the features. gave we that we or attributed again, X specifics the assuming security some $XX. features out But those technology of the can and of probably to be can $XX. be new for include above a advanced to goalpost can't use features, of model incrementally more confident of us So and get cost it again, I I But existing that security of the we expect current I will of how little helps into cost. bit. the particulars in $XX, And to would you has that benefit, much design the of the numbers difference kind And provide. cost

Christina, follow-up then the we're first mentioned free get you going kind a one If shipment million. $XX No, helpful. right, change. -- million basically the $XX to quarter. just fourth from is it's the on I my to that it. of like so That's And quarter math talking timing flow guidance cash totally some

slipping kind that right project same magnitude recovering a just a is visibility is and could you just in into -- it is collecting one single shipment you Or of multitude little trend? are that of So that's that of that bit just -- that is of of early kind math or have on seeing it that projects 'XX? kind our

Thanks, Yes. Damian.

projects me from the opposed the But before to was end you revenue our period, later to shipment can forecast. in international the no related change the business. shipments expect in collect because of happening of those that collections this our cash that shipment. QX. the the year. Let happen ability will currency It's a as in clarify significant few our the to just And is QX timing a now not to delay impacts it There's

this, cash lowest I though, think quarter know to our and conversion. caution just you QX flow be I in tends will terms of

moderate And flow so shipments seasonality will cash on business. although that's free just these pretty in, based of see in of and the conversion will the rest move still you QX,

for I'm like closing showing no to remarks. this back I would further now questions at time. Aaron it to turn

operating to executing our were quarter, M&A, businesses, productivity, exactly what It to on to like execute our continue we team we their driving the thank Thank I'd very a busy we for strong you right. and members said do. NXT going All very doing here of much. in QX. was certainly again efforts strategy, all

QX earnings thank day. a call. our the as to again, again of who XXXX. Thank So We beginning you their and for questions and at you great we everyone forward today joined report the have look

for This you does today's the in your participation program. conclude conference. Thank

disconnect. now may You