Press release·02/20/2025 22:18:32

Crane NXT Delivers Solid Financial Performance in 2024

Crane NXT, a leading provider of advanced technology solutions, has reported its financial results for the year ended December 31, 2024. The company’s overall performance showcases its ability to navigate a dynamic market environment and execute on its strategic initiatives.

Recent Transactions In 2023, Crane NXT entered into a $500 million, five-year revolving credit facility and a $350 million, 3-year term loan facility to support its operations and growth initiatives. In 2024, the company amended the credit agreement to increase the revolving facility to $700 million and add a £300 million delayed draw term loan to fund the acquisition of De La Rue Authentication Solutions.

Crane NXT also made two key acquisitions in 2024. In May, the company acquired OpSec Security, a global leader in brand protection and authentication solutions, for $270 million. This transaction expanded Crane NXT’s Security and Authentication Technologies (SAT) segment. In October, the company signed an agreement to acquire De La Rue Authentication Solutions, a leading provider of digital and physical security technologies, for £300 million. This acquisition is expected to close in the second quarter of 2025.

Financial Performance In 2024, Crane NXT reported total net sales of $1,486.8 million, an increase of 6.9% compared to 2023. This growth was driven by a 21.5% increase in the SAT segment, partially offset by a 1.5% decline in the Crane Payment Innovations (CPI) segment.

The SAT segment benefited from $86.0 million in sales from the OpSec acquisition, as well as 4.5% core sales growth. The CPI segment saw a decline due to lower volumes, particularly in the gaming industry, partially offset by favorable pricing.

Cost of sales increased by 11.5% to $821.7 million, driven by the impact of the OpSec acquisition and higher material and manufacturing costs. Selling, general and administrative expenses increased by 5.3% to $386.2 million, also primarily due to the OpSec acquisition.

Operating profit decreased by 6.3% to $268.8 million. The CPI segment saw a 5.9% decline in operating profit due to unfavorable mix, lower volumes, and restructuring charges. The SAT segment’s operating profit decreased by 4.6%, impacted by the dilutive effect of the OpSec acquisition and higher material costs, partially offset by productivity gains.

Crane NXT’s effective tax rate for 2024 was 18.7%, lower than the prior year’s 21.5%, due to a favorable mix of jurisdictional earnings and the release of uncertain tax positions.

Segment Performance

Crane Payment Innovations (CPI) CPI’s net sales declined 1.5% to $873.2 million in 2024. Sales of Payment Acceptance and Dispensing Products decreased 2.5%, while Service revenue increased 4.4%. The segment’s operating profit declined 5.9% to $228.4 million, primarily due to unfavorable mix, lower volumes, and higher restructuring charges, partially offset by favorable pricing, lower material costs, and productivity gains.

Security and Authentication Technologies (SAT) The SAT segment’s net sales increased 21.5% to $613.6 million, driven by the OpSec acquisition and 4.5% core sales growth. Banknote and security product sales grew 4.3%, while Authentication Products and Solutions sales increased significantly due to the OpSec acquisition. Operating profit for the segment decreased 4.6% to $110.9 million, reflecting the dilutive impact of the OpSec acquisition and higher material costs, partially offset by productivity gains.

Corporate Corporate expenses decreased by 2.5% to $70.5 million in 2024, primarily due to lower transaction-related expenses.

Liquidity and Capital Resources Crane NXT’s operating cash flow was $214.1 million in 2024, compared to $276.3 million in 2023, with the decrease primarily driven by the timing of shipments impacting working capital. The company used $318.0 million in investing activities, mainly for the OpSec acquisition, compared to $31.1 million in 2023.

Financing activities provided $62.1 million in 2024, compared to $252.5 million used in 2023. This increase was primarily due to higher net proceeds from the revolving facility, partially offset by higher net repayments on the term facility.

As of December 31, 2024, Crane NXT had total debt of $750.6 million and a debt-to-capitalization ratio of 41.3%. The company’s net debt (total debt less cash and cash equivalents) was $584.8 million, with a net debt-to-equity ratio of 54.9%.

Crane NXT’s credit ratings from S&P Global Ratings and Moody’s Investor Services were BB+ and Ba1, respectively, both with stable outlooks. The company believes these ratings provide it with adequate access to public and private debt markets.

Outlook and Strategic Initiatives Crane NXT’s management remains cautiously optimistic about the company’s future prospects. The integration of the OpSec and De La Rue Authentication Solutions acquisitions is expected to strengthen the SAT segment and expand the company’s capabilities in brand protection and authentication solutions.

In the CPI segment, the company will continue to focus on productivity improvements, cost management, and strategic pricing initiatives to mitigate the impact of market challenges. The SAT segment is well-positioned to capitalize on growing demand for security and authentication technologies globally.

Overall, Crane NXT’s diversified portfolio, strategic acquisitions, and ongoing operational improvements position the company for continued success in the years ahead.

Conclusion Crane NXT’s 2024 financial results demonstrate the company’s ability to navigate a dynamic market environment and execute on its strategic initiatives. The acquisitions of OpSec and the pending acquisition of De La Rue Authentication Solutions have strengthened the company’s Security and Authentication Technologies segment, while the Crane Payment Innovations segment continues to face headwinds.

Crane NXT’s strong liquidity position, access to capital markets, and focus on operational excellence position the company well for the future. As the company continues to integrate its recent acquisitions and optimize its portfolio, investors can expect Crane NXT to remain a leader in advanced technology solutions.