Crane NXT Co
For the period ended Sep 30, 2024. Filed Nov 6, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 6, 2024
CXT$57.57-2.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-07.
0001628280-24-035654
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-06.
0001628280-24-045745
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 75 previous paragraphs and 82 current paragraphs.
24 unchanged; 35 reworded; 23 added; 16 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (23)
Current report
De La Rue Authentication Solutions Acquisition
Current report
On October 15, 2024, we signed a definitive agreement with De La Rue Holdings, a wholly-owned subsidiary of De La Rue plc, to acquire its authentication business (“De La Rue Authentication Solutions”) for 300 million British pounds (approximately $390 million) in cash, subject to customary adjustments. The transaction is expected to close in the first half of 2025, subject to customary closing conditions. Transaction costs incurred for the three-and-nine months ended September 30, 2024, were $3.3 million and $5.0 million, respectively.
Current report
De La Rue Authentication Solutions is a leading global provider of digital and physical security and authentication technologies to governments and brands. De La Rue Authentication Solutions will be combined with OpSec within the Security and Authentication Technologies segment upon close.
Current report
•core sales growth of $16.7 million, or 4.7%, driven primarily by higher core sales in Security and Authentication Technologies (“SAT”) as a result of favorable pricing and higher banknote volumes in our international currency business, and
Current report
•favorable foreign currency translation of $1.6 million, or 0.5%.
Current report
Selling, general and administrative expenses increased by $10.5 million, or 12.2%, to $96.3 million in 2024. The increase was driven primarily by the impact of the OpSec acquisition.
Current report
Operating profit decreased by $4.7 million, or 5.9%, to $75.0 million in 2024. The decrease was primarily driven by unfavorable mix in both segments, and the impact of the OpSec acquisition, partially offset by productivity gains and the impact of cost saving actions.
Current report
Crane Payment Innovations (“CPI”)
Current report
Sales increased by $3.3 million, or 1.5%, to $224.9 million in 2024, driven by higher core sales.
Current report
Cost of sales increased by $2.5 million, or 2.3%, to $113.6 million, as productivity gains, and lower material and other manufacturing costs were more than offset by unfavorable mix.
Current report
Operating profit increased by $4.9 million, or 8.2%, to $64.6 million in 2024. The increase primarily reflected favorable pricing, lower material and other manufacturing costs, and productivity gains of $8.8 million, or 14.7%, the impact of cost saving actions of $2.3 million, or 3.8%, partially offset by unfavorable mix of $6.2 million, or 10.4%.
Current report
Security and Authentication Technologies (“SAT”)
Current report
Sales increased by $47.3 million, or 36.0%, to $178.6 million in 2024, primarily driven by the sales benefit from the OpSec acquisition of $32.3 million, or 24.6%, and higher core sales of $13.4 million, or 10.2%.
Current report
Cost of sales increased by $42.3 million, or 55.4%, to $118.6 million in 2024, primarily due to the impact of the OpSec acquisition, higher material and other manufacturing costs, and unfavorable mix.
Current report
Operating profit decreased by $3.5 million, or 10.7%, to $29.3 million in 2024, reflecting unfavorable mix of $4.3 million, or 13.1%, and the impact of the OpSec acquisition of $3.5 million, or 10.7%, partially offset by productivity gains of $4.2 million, or 12.8%. Favorable pricing and higher volumes of $13.4 million were mostly offset by higher material and other manufacturing costs.
Current report
Results from Operations – Nine Month Periods Ended September 30,
Current report
•sales benefit from the OpSec acquisition of $52.7 million, or 5.1%,
Current report
•unfavorable foreign currency translation of $5.1 million, or 0.5%.
Current report
Cost of sales increased by $57.3 million, or 10.5%, to $603.1 million in 2024. The increase was driven primarily by the impact of the OpSec acquisition, and unfavorable mix, partially offset by productivity gains.
Current report
Segment Results of Operations - Nine Month Periods Ended September 30,
Current report
Crane Payment Innovations
Current report
Security and Authentication Technologies
Current report
Sales increased by $66.3 million, or 18.3%, to $429.4 million in 2024, reflecting the sales benefit from the OpSec acquisition of $52.7 million, or 14.5%, and higher core sales of $12.3 million, or 3.4%.
Removed paragraphs (16)
Previous report
•unfavorable foreign currency translation of $5.2 million, or 1.4%.
Previous report
Selling, general and administrative expenses decreased by $6.3 million, or 6.3%, to $93.3 million in 2024. The decrease was driven primarily by lower transaction related expenses, cost saving actions, and favorable foreign currency translation, partially offset by the impact from the OpSec acquisition.
Previous report
Operating profit decreased by $1.2 million, or 1.7%, to $67.6 million in 2024. The decrease was primarily driven by unfavorable product mix at CPI, and the impact from the OpSec acquisition, partially offset by lower transaction related expenses, and productivity gains.
Previous report
Sales decreased by $1.5 million, or 0.7%, to $224.4 million in 2024, driven by unfavorable foreign currency translation of $4.2 million, or 1.9%, partially offset by higher core sales of $2.7 million, or 1.2%.
Previous report
Cost of sales increased by $2.8 million, or 2.5%, to $114.6 million, as lower material and other manufacturing costs, productivity gains and favorable foreign currency translation were more than offset by unfavorable mix.
Previous report
Operating profit decreased by $3.4 million, or 5.2%, to $61.4 million in 2024. The decrease primarily reflected unfavorable mix of $13.2 million, or 20.3%, partially offset by lower material and other manufacturing costs, and productivity gains of $8.1 million, or 12.5%.
Previous report
Sales increased by $19.7 million, or 15.6%, to $146.2 million in 2024, primarily driven by the sales benefit from the OpSec acquisition of $20.5 million, or 16.2%.
Previous report
Results from Operations – Six Month Periods Ended June 30,
Previous report
•sales benefit from the OpSec acquisition of $20.5 million, or 3.0%,
Previous report
•core sales decline of $11.0 million, or 1.6%, driven primarily by lower volumes at CPI, and
Previous report
•unfavorable foreign currency translation of $6.8 million, or 1.0%.
Previous report
Cost of sales increased by $12.5 million, or 3.5%, to $370.9 million in 2024. The increase was driven primarily by unfavorable mix, and the impact of the OpSec acquisition, partially offset by productivity gains, the impact of lower sales volumes, and favorable foreign currency translation.
Previous report
Segment Results of Operations - Six Month Periods Ended June 30,
Previous report
Sales increased by $19.0 million, or 8.2%, to $250.8 million in 2024, reflecting the sales benefit from the OpSec acquisition of $20.5 million, or 8.8%, partially offset by lower core sales of $1.0 million, or 0.4%.
Previous report
Cost of sales increased by $12.3 million, or 8.8%, to $151.5 million in 2024, primarily due to the impact of the OpSec acquisition, and higher material and other manufacturing costs, partially offset by productivity gains, favorable mix, and the impact of lower sales volumes.
Previous report
Operating profit decreased by $8.1 million, or 15.5%, to $44.2 million in 2024, reflecting higher compensation, benefits and engineering costs of $7.3 million, or 13.9%, the impact of the OpSec acquisition of $5.4 million, or 10.3%, lower sales volumes of $4.7 million, or 9.1%, and higher material and other manufacturing costs net of favorable pricing of $3.6 million, or 6.8%, partially offset by productivity gains of $8.8 million, or 16.8%, and favorable mix of $4.6 million, or 8.8%.
Reworded paragraphs (35)
Previous wording
As of June 30, 2024, we drew down $215.0 million, net on our Revolving Facility.
Current wording
As of September 30, 2024, we drew down $310.5 million and repaid $160.5 million on our Revolving Facility.
Previous wording
In the first quarter of 2024, in response to challenging industry conditions, we initiated workforce reductions in Crane Payment Innovations (“CPI”), incurring $2.7 million of severance charges during the six months ended June 30, 2024. We expect to substantially complete these restructuring actions in 2025.
Current wording
In the first quarter of 2024, in response to challenging industry conditions, we initiated workforce reductions in Crane Payment Innovations (“CPI”), incurring $2.7 million of severance charges during the nine months ended September 30, 2024. We expect to substantially complete these restructuring actions in 2025.
Previous wording
On May 3, 2024, we acquired the OpSec Security business (“OpSec”), for a base purchase price of $270 million on a cash-free and debt-free basis, subject to customary purchase price adjustments. We utilized $210 million from our Revolving Facility and cash on hand to fund the acquisition. OpSec is a global leader in brand protection and authentication solutions, serving the world’s most recognized brands, as well as government agencies and financial insti tutions. In connection with the acquisition of OpSec, we renamed our “Crane Currency” reportable segment to “Security and Authentication Technologies,” which consists of the Crane Currency business and the acquired OpSec business.
Current wording
On May 3, 2024, we acquired the OpSec Security business (“OpSec”), for a base purchase price of $270 million on a cash-free and debt-free basis, subject to customary purchase price adjustments. We utilized$210.0 million from our Revolving Facility and cash on hand to fund the acquisition. OpSec is a global leader in brand protection and authentication solutions, serving the world’s most recognized brands, as well as government agencies and financial insti tutions. In connection with the acquisition of OpSec, we renamed our “Crane Currency” reportable segment to “Security and Authentication Technologies,” which consists of the Crane Currency business and the acquired OpSec business.
Previous wording
The following information should be read in conjunction with our Unaudited Consolidated and Combined Condensed financial statements and related notes. All comparisons below refer to the second quarter 2024 versus the second quarter 2023, unless otherwise specified.
Current wording
The following information should be read in conjunction with our Unaudited Consolidated and Combined Condensed financial statements and related notes. All comparisons below refer to the third quarter 2024 versus the third quarter 2023, unless otherwise specified.
Previous wording
Sales increased by $2.7 million, or 0.4%, to $684.2 million in 2024. The change in sales included:
Current wording
Sales increased by$50.6 million, or 14.3%, to $403.5 million in 2024. The change in sales included:
Previous wording
•benefit in sales from the May 2024 OpSec acquisition of $20.5 million, or 5.8%,
Current wording
•a benefit in sales from the May 2024 OpSec acquisition of $32.3 million, or 9.1%,
Previous wording
Cost of sales increased by $25.7 million, or 14.0%, to $209.7 million in 2024. The increase was driven primarily by the impact from the OpSec acquisition, unfavorable mix in CPI, and higher material and other manufacturing costs in SAT, partially offset by productivity gains.
Current wording
Cost of sales increased by $44.8 million, or 23.9%, to $232.2 million in 2024. The increase was driven primarily by the impact of the OpSec acquisition, unfavorable mix, higher material and other manufacturing costs in SAT, and unfavorable foreign currency translation, partially offset by productivity gains.
Previous wording
Our effective tax rate for the three months ended June 30, 2024 is higher than the prior year’s comparable period primarily due to the mix of non-U.S. earnings.
Current wording
Our effective tax rate for the three months ended September 30, 2024 was higher than the prior year’s comparable period primarily due to the mix of non-U.S. earnings.
Previous wording
•Sales of Payment Acceptance and Dispensing Products decreased by $2.5 million, or 1.3%, to $190.6 million in 2024. The decrease was driven by unfavorable foreign currency translation of $4.2 million, or 2.2%, partially offset by higher core sales of $1.7 million, or 0.9%. Unfavorable foreign currency translation primarily reflected the weakening of the Japanese yen against the U.S. dollar, partially offset by the strengthening of the British pound against the U.S. dollar.
Current wording
•Sales of Payment Acceptance and Dispensing Products increased by $1.8 million, or 1.0%, to $190.9 million in 2024. The increase was driven by higher core sales. The favorable foreign currency translation from the strengthening of the British pound against the U.S. dollar was offset by unfavorable foreign currency translation from the weakening of the Japanese yen against the U.S. dollar.
Previous wording
•Service revenue increased by $1.0 million, or 3.0%, to $33.8 million in 2024, primarily driven by favorable pricing.
Current wording
•Service revenue increased by $1.5 million, or 4.6%, to $34.0 million in 2024, primarily driven by favorable pricing.
Previous wording
Selling, general and administrative expense decreased by $0.9 million, or 1.8%, to $48.4 million, primarily due to lower compensation and benefits through cost saving actions, and favorable foreign currency translation.
Current wording
Selling, general and administrative expense decreased by $4.1 million, or 8.1%, to $46.7 million, primarily due to cost saving actions.
Previous wording
•Banknote and security product sales decreased by $1.4 million, or 1.1%, to $124.1 million in 2024, reflecting lower core sales predominantly driven by lower volumes in international markets impacted by the timing of shipments, and unfavorable foreign currency translation, as the Swedish krona and the euro weakened against the U.S. dollar.
Current wording
•Banknote and security product sales increased by $15.3 million, or 11.8%, to $145.4 million in 2024, reflecting higher core sales predominantly driven by higher volumes in international markets, and favorable foreign currency translation, as the euro and the Swedish krona strengthened against the U.S. dollar.
Previous wording
•Authentication products and solutions sales increased to $22.1 million in 2024, primarily driven by the sales benefit from the OpSec acquisition.
Current wording
•Authentication products and solutions sales increased to $33.2 million in 2024, primarily driven by the sales benefit from the OpSec acquisition.
Previous wording
Selling, general and administrative expense increased by $7.5 million, or 38.3%, to $27.1 million in 2024, primarily due to the impact from the OpSec acquisition.
Current wording
Selling, general and administrative expense increased by $8.5 million, or 38.3%, to $30.7 million in 2024, primarily due to the impact of the OpSec acquisition.
Previous wording
The following information should be read in conjunction with our Unaudited Consolidated and Combined Condensed Financial Statements and related notes. All comparisons below refer to the first six months of 2024 versus the first six months of 2023, unless otherwise specified.
Current wording
The following information should be read in conjunction with our Unaudited Consolidated and Combined Condensed Financial Statements and related notes. All comparisons below refer to the first nine months of 2024 versus the first nine months of 2023, unless otherwise specified.
Previous wording
Sales increased by$18.2 million, or 5.2%, to $370.6 million in 2024. The change in sales included:
Current wording
Sales increased by $53.3 million, or 5.2%, to $1,087.7 million in 2024. The change in sales included:
Previous wording
•core sales growth of $2.9 million, or 0.8%, driven primarily by higher core sales at CPI; and
Current wording
•core sales growth of $5.7 million, or 0.6%, driven primarily by favorable pricing in SAT, and
Previous wording
Selling, general and administrative expenses decreased by $0.8 million, or 0.4%, to $187.6 million in 2024. The decrease was driven primarily by cost saving actions, favorable foreign currency translation, and productivity gains, partially offset by the impact from the OpSec acquisition.
Current wording
Selling, general and administrative expenses increased by $9.7 million, or 3.5%, to $283.9 million in 2024. The increase was driven primarily by the impact of the OpSec acquisition, partially offset by cost saving actions.
Previous wording
Operating profit decreased by $11.7 million, or 8.7%, to $123.0 million in 2024. The decrease was primarily driven by CPI unfavorable mix and lower volumes, as well as the impact from the OpSec acquisition, partially offset by favorable pricing across both segments and productivity gains.
Current wording
Operating profit decreased by $16.4 million, or 7.6%, to $198.0 million in 2024. The decrease was primarily driven by unfavorable mix and lower volumes in CPI, the impact of the OpSec acquisition, as well as unfavorable foreign currency translation, partially offset by favorable pricing, net of inflation and productivity gains, and the impact of cost saving actions in CPI.
Previous wording
Our effective tax rate for the six months ended June 30, 2024 is higher than the prior year’s comparable period primarily due to the mix of non-U.S. earnings.
Current wording
Our effective tax rate for the nine months ended September 30, 2024 was higher than the prior year’s comparable period primarily due to the mix of non-U.S. earnings.
Previous wording
Sales decreased by $16.3 million, or 3.6%, to $433.4 million in 2024, driven by lower core sales of $9.9 million, or 2.2%, and unfavorable foreign currency translation of $6.4 million, or 1.4%.
Current wording
Sales decreased by $13.0 million, or 1.9%, to $658.3 million in 2024, driven by lower core sales of $6.6 million, or 1.0%, and unfavorable foreign currency translation of $6.4 million, or 0.9%.
Previous wording
•Sales of Payment Acceptance and Dispensing Products decreased $18.8 million, or 4.9%, to $367.0 million in 2024. The decrease reflected lower core sales of $12.4 million, or 3.2%, as favorable pricing was more than offset by lower volumes primarily in gaming as customers adjust inventory levels to reflect reduced lead times. Included in the sales decrease is unfavorable foreign currency translation of $6.4 million, or 1.7%, primarily reflecting the weakening of the Japanese yen against the U.S. dollar, partially offset by the strengthening of the British pound against the U.S. dollar.
Current wording
•Sales of Payment Acceptance and Dispensing Products decreased $17.0 million, or 3.0%, to $557.9 million in 2024. The decrease reflected lower core sales of $10.6 million, or 1.8%, as favorable pricing was more than offset by lower volumes primarily in gaming as customers adjust inventory levels to reflect reduced lead times. Included in the sales decrease is unfavorable foreign currency translation of $6.4 million, or 1.1%, primarily reflecting the weakening of the Japanese yen against the U.S. dollar, partially offset by the strengthening of the British pound against the U.S. dollar.
Previous wording
•Service revenue increased by $2.5 million, or 3.9%, to $66.4 million in 2024, primarily driven by favorable pricing.
Current wording
•Service revenue increased by $4.0 million, or 4.1%, to $100.4 million in 2024, primarily driven by favorable pricing.
Previous wording
Cost of sales increased by $0.2 million, or 0.1%, to $219.4 million in 2024, as lower manufacturing costs, the impact of lower sales volumes, productivity gains and favorable foreign currency translation were more than offset by unfavorable mix.
Current wording
Cost of sales increased by $2.7 million, or 0.8%, to $333.0 million in 2024, as lower material and other manufacturing costs, the impact of lower sales volumes, productivity gains and favorable foreign currency translation were more than offset by unfavorable mix.
Previous wording
Selling, general and administrative expense decreased by $6.7 million, or 6.4%, to $97.2 million in 2024, primarily due to cost saving actions, and lower reserves on customer receivables driven by higher collections.
Current wording
Selling, general and administrative expense decreased by $10.8 million, or 7.0%, to $143.9 million in 2024, primarily due to cost saving actions, and lower reserves on customer receivables driven by higher collections.
Previous wording
Operating profit decreased by $12.5 million, or 9.9%, to $114.1 million in 2024. The decrease primarily reflected unfavorable mix of $24.3 million, or 19.2%, and lower volumes of $11.9 million, or 9.4%, partially offset by favorable pricing, lower manufacturing costs and productivity gains of $24.4 million, or 19.2%. Cost saving actions of $4.9 million, or 3.9%, were mostly offset by restructuring charges and unfavorable foreign currency translation.
Current wording
Operating profit decreased by $7.6 million, or 4.1%, to $178.7 million in 2024. The decrease primarily reflected unfavorable mix of $30.5 million, or 16.4%, lower volumes of $12.6 million, or 6.8%, and unfavorable foreign currency translation of $3.1 million, or 1.6%, partially offset by favorable pricing, lower material and other manufacturing costs and productivity gains of $32.4 million, or 17.4%, and the impact of cost saving actions of $7.2 million, or 3.9%.
Previous wording
•Banknote and security product sales decreased by $2.0 million, or 0.9%, to $227.5 million in 2024, reflecting lower core sales predominantly driven by lower volumes in international markets impacted by the timing of shipments, and unfavorable foreign currency translation, as the Swedish krona weakened against the U.S. dollar.
Current wording
•Banknote and security product sales increased by $13.3 million, or 3.7%, to $372.9 million in 2024, reflecting higher core sales predominantly driven by favorable pricing, and favorable foreign currency translation, as the euro strengthened against the U.S. dollar.
Previous wording
•Authentication products and solutions sales increased by $21.0 million to $23.3 million in 2024, primarily driven by the sales benefit from the OpSec acquisition.
Current wording
•Authentication products and solutions sales increased by $53.0 million to $56.5 million in 2024, primarily driven by the sales benefit from the OpSec acquisition.
Previous wording
Cost of sales increased by $22.9 million, or 31.7%, to $95.1 million in 2024, primarily due to the impact from the OpSec acquisition, and higher material and other manufacturing costs, partially offset by productivity gains.
Current wording
Cost of sales increased by $54.6 million, or 25.3%, to $270.1 million in 2024, primarily due to the impact of the OpSec acquisition, and higher material and other manufacturing costs, partially offset by productivity gains.
Previous wording
Selling, general and administrative expense increased by $14.8 million, or 36.7%, to $55.1 million in 2024, primarily due to higher compensation and benefits, higher engineering costs associated with the U.S. Currency redesign program, and the impact of the OpSec acquisition.
Current wording
Selling, general and administrative expense increased by $23.3 million, or 37.3%, to $85.8 million in 2024, primarily due to the impact of the OpSec acquisition, and higher engineering costs associated with the U.S. Currency redesign program.
Previous wording
Operating profit decreased by $10.7 million, or 30.8%, to $24.0 million in 2024, reflecting higher material and other manufacturing costs net of favorable pricing of $8.0 million, or 23.1%, and the impact from the OpSec acquisition of $5.4 million, or 15.6%, partially offset by productivity gains of $5.2 million, or 15.0%.
Current wording
Operating profit decreased by $11.6 million, or 13.6%, to $73.5 million in 2024, reflecting higher material and other manufacturing costs net of favorable pricing of $9.3 million, or 11.0%, the impact of the OpSec acquisition of $8.9 million, or 10.4%, higher engineering costs of $4.3 million, or 5.1%, partially offset by productivity gains of $12.9 million, or 15.2%.
Previous wording
Our current cash balance, together with cash we expect to generate from future operations along with our borrowings available under our Revolving Facility and our term facility, is expected to be sufficient to finance our short- and long-term capital requirements. In the six months ended June 30, 2024, we drew down $280.0 million and repaid $65.0 million on our Revolving Facility.
Current wording
Our current cash balance, together with cash we expect to generate from future operations along with our borrowings available under our Revolving Facility and our term facility, is expected to be sufficient to finance our short- and long-term capital requirements. In the nine months ended September 30, 2024, we drew down $310.5 million and repaid $160.5 million on our Revolving Facility.
Previous wording
Cash provided by operating activities was $66.3 million in the first six months of 2024, as compared to $95.0 million during the same period last year. The decrease in cash provided by operating activities was primarily driven by increased working capital requirements.
Current wording
Cash provided by operating activities was $133.0 million in the first nine months of 2024, as compared to $197.8 million during the same period last year. The decrease in cash provided by operating activities was primarily driven by increased working capital requirements.
Previous wording
Cash used for investing activities was $291.1 million in the first six months of 2024, as compared to $8.5 million in the comparable period last year. The increase in cash used for investing activities was primarily driven by the acquisition of OpSec.
Current wording
Cash used for investing activities was $304.4 million in the first nine months of 2024, as compared to $16.1 million in the comparable period last year. The increase in cash used for investing activities was primarily driven by the acquisition of OpSec.
Previous wording
Cash provided by financing activities was $190.2 million during the first six months of 2024 compared to cash used for financing activities of $43.7 million in the comparable period last year. The increase in cash provided by financing activities was primarily driven by higher net proceeds from the Revolving Facility used to fund the acquisition of OpSec.
Current wording
Cash provided by financing activities was $115.8 million during the first nine months of 2024 compared to cash used for financing activities of $176.5 million in the comparable period last year. The increase in cash provided by financing activities was primarily driven by higher net proceeds from the Revolving Facility used to fund the acquisition of OpSec, and lower repayments on the term facility.