What changed in this filing

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Item 1. Business

2025-02-20 compared with 2024-02-22 · 38 added, 45 removed, 70 unchanged (54% of the section changed)

Crane NXT is a premier industrial technology company that provides proprietary and trusted technology solutions to secure, detect, and authenticate what matters most to its customers.

The company is a pioneer in advanced, proprietary micro-optics technology for securing physical products, and its sophisticated electronic equipment and associated software leverages proprietary core capabilities with detection and sensing technologies.

The company is a pioneer in advanced, proprietary micro-optics technology for securing physical products, as well as digital authentication, and its sophisticated electronic equipment and associated software leverages proprietary core capabilities with detection and sensing technologies.

We are comprised of two reporting segments:

Crane Payment Innovations (“CPI”) and Crane Currency.

Crane Payment Innovations (“CPI”) and Security and Authentication Technologies (“SAT”).

We are committed to delivering shareholder value by focusing on our proprietary and differentiated technology and investing in core businesses to capitalize on opportunities to enhance organic growth.

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We foster a performance-based culture with clearly defined values and utilize our well-established Crane Business System (CBS) to drive operational excellence and profitable growth.

Recent Transactions

On April 3, 2023, Holdings was separated (the “Separation”) into two independent, publicly-traded companies, Crane NXT, Co.

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Following the consummation of the Separation, our common stock is listed under the symbol “CXT” on the New York Stock Exchange.

Due to SpinCo’s larger operations, greater tangible assets, greater fair value and greater net sales, in each case, relative to ours, among other factors, SpinCo was considered to be the “accounting spinnor” and therefore is the “accounting successor” to Holdings for accounting purposes, notwithstanding the legal form of the Separation.

Therefore, following the Separation, our historical financial statements are comprised solely of combined carve-out financial statements representing only our operations, assets, liabilities and equity on a stand-alone basis derived from the consolidated financial statements and accounting records of Holdings.

Recent Transactions

Credit Facilities

We are party to a senior secured credit agreement (the “Credit Agreement”) entered into on March 17, 2023, which provides for (i) a $500 million, five-year revolving credit facility (the “Revolving Facility”) and (ii) a $350 million, 3-year term loan facility (the “Term Facility”), funding under each of which became available in connection with the Separation, upon the satisfaction of customary conditions of facilities of this type.

On March 31, 2023, we borrowed the full amount of the Term Facility and $245.0 million was repaid as of December 31, 2023.

Separation Agreements

On April 3, 2023, we entered into definitive agreements with SpinCo in connection with the Separation.

The agreements set forth the terms and conditions of the Separation and provide a framework for Crane NXT’s relationship with SpinCo following the Separation, including the allocation between Crane NXT and SpinCo of Crane NXT’s and SpinCo’s assets, liabilities and obligations attributable to periods prior to, at and after the Separation.

These agreements include the Separation and Distribution Agreement, which contains certain key provisions related to the Separation, as well as a Transition Services Agreement, a Tax Matters Agreement, an Employee Matters Agreement and an Intellectual Property Matters Agreement (each, as described below).

Separation and Distribution Agreement

The Separation and Distribution Agreement sets forth, among other things, the agreements between us and SpinCo regarding the principal transactions necessary to effect the Separation.

It also sets forth other agreements that govern certain aspects of our ongoing relationship with SpinCo after the completion of the Separation.

Transition Services Agreement

The Transition Services Agreement provides for the transition of Holdings into two independent, publicly-traded companies following the consummation of the Separation, and provides each party time to replace certain assets and employees that

have been allocated to the other party.

Under the Transition Services Agreement, we agreed with SpinCo to provide transition service support to the other for various periods of time of up to 18 months in the areas of finance, tax, human resources, legal and information technology.

Such services are provided on customary commercial terms, and each such service can be terminated prior to the expected termination date of such service if it is no longer required.

The Transition Services Agreement was negotiated in the context of a parent-subsidiary relationship and in the context of the Separation.

Transactions under this agreement did not have a material impact to our financial statements and services were substantially completed as of December 31, 2023.

Tax Matters Agreement

The Tax Matters Agreement, among other things, governs our and SpinCo’s respective rights, responsibilities and obligations after the Separation with respect to tax liabilities and benefits (including any taxes imposed that are attributable to the failure of the Distribution and certain related transactions to qualify as a transaction that is tax-free for U.S.

federal income tax purposes), tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and other matters regarding taxes.

Although enforceable as between the parties, the Tax Matters Agreement will not be binding on the Internal Revenue Service or other tax authorities.

Employee Matters Agreement

The Employee Matters Agreement, among other things, governs Crane NXT’s, SpinCo’s and their respective subsidiaries’ rights, responsibilities and obligations after the Separation with respect to the following matters:

(i) employees and former employees (and their respective dependents and beneficiaries) who are or were employed with Crane NXT, SpinCo or their respective subsidiaries, (ii) the allocation of assets and liabilities generally relating to employees, employment or service-related matters and employee benefit plans, (iii) employee compensation plans and director compensation plans, including equity plans, and (iv) other human resources, employment and employee benefits matters.

Intellectual Property Matters Agreement

The Intellectual Property Matters Agreement, among other things, governs the continued ownership and use by Crane NXT and SpinCo of their respective trademarks and trade names that include or are comprised of the term “Crane” in their respective businesses.

We are party to a senior secured credit agreement (the “Credit Agreement”) entered into on March 17, 2023, which provides for a $500 million, five-year revolving credit facility (the “Revolving Facility”), funding under which became available in connection with the Separation.

On December 9, 2024, we entered into an amendment to the Credit Agreement which increased the Revolving Facility by $200 million to an aggregate $700 million and provided a delayed draw term loan of 300 million British pounds to be used as part of the funding for the De La Rue Authentication Solutions acquisition discussed below, subject to customary closing conditions including the closing of the De La Rue Authentication Solutions transaction.

On March 17, 2023, we also entered into a $350 million, 3-year term loan facility (the “Term Facility”), funding under which became available in connection with the Separation.

On December 9, 2024, proceeds from the Revolving Facility were used to repay the outstanding Term Facility.

OpSec Acquisition

On May 3, 2024, we acquired OpSec Security (“OpSec”), for a base purchase price of $270 million on a cash-free and debt-free basis, subject to customary purchase price adjustments.

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.

De La Rue Authentication Solutions Acquisition

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 in cash, subject to customary adjustments.

The transaction is expected to close in the second quarter of 2025, subject to customary closing conditions.

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 included within the Security and Authentication Technologies segment upon close.

Reportable Segments

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.

The CPI segment remains unchanged.

For additional information on recent business developments and other information about us and our business, please refer to the information set forth under the captions, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in Part II, Item 7 of this report, as well as in Part II, Item 8 under Note 4, “Segment Information,” in the Notes to Consolidated and Combined Financial Statements for sales, operating profit and assets employed by each segment.

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operates through two reportable segments.

Crane Payment Innovations

Crane Payment Innovations (CPI)

CPI provides electronic equipment and associated software leveraging extensive and proprietary core capabilities with various detection and sensing technologies for applications including verification and authentication of payment transactions.

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Key research and development and manufacturing facilities are located in the United States, the United Kingdom, Mexico, Japan, and Germany, with additional sales offices across the world.

Crane Currency

Crane Currency provides advanced security solutions based on proprietary technology for securing physical products, including banknotes, consumer goods and industrial products.

Facilities are located in the United States, Sweden and Malta.

Security and Authentication Technologies (SAT)

SAT provides advanced security solutions based on proprietary technology for securing physical products, including banknotes, consumer goods, and industrial products.

SAT also provides brand protection, authentication solutions, and digital content protection across online marketplaces, social media platforms, and websites.

These solutions serve various brands, as well as government agencies and financial insti tutions.

Key research and development and manufacturing facilities are located in the United States, United Kingdom, Sweden and Malta.

Other Matters Relating to Our Business as a Whole

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Our primary basis of competition is providing high quality products, with technological differentiation, at competitive prices, with superior customer service and timely delivery.

We are a leader in a number of distinct areas including materials and surface technology applied for anti-counterfeiting applications, differentiated capabilities in the design and manufacturing of detection systems, and image recognition software

built on advance algorithms to authenticate products.

We are a leader in several distinct areas including materials and surface technology applied for anti-counterfeiting applications, differentiated capabilities in the design and manufacturing of detection systems, digital content protection technology, and image recognition software built on advance algorithms to authenticate products.

Our products are sold into primary end markets which include payment automation solutions, banknote design and production, along with a wide range of consumer related and financial services end markets.

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Since our products are sold in such a wide variety of markets, we do not believe that we can reliably quantify or predict the potential effects of changes in any of the aforementioned factors.

Our engineering and product development activities are focused on improving existing products, customizing existing products for particular customer requirements, as well as the development of new products.

We own numerous patents, trademarks, copyrights, trade secrets and licenses to intellectual property, no one of which is of such importance that termination would materially affect our business.

From time to time, however, we do engage in litigation to protect our intellectual property.

Our engineering and product development activities are focused on improving existing products, customizing existing products to meet customer requirements, as well as the development of new products.

We own numerous patents, trademarks, copyrights, trade secrets and licenses to intellectual property, none of which is of such importance that termination would materially affect our business.

From time to time, we engage in litigation to protect our intellectual property.

Raw Materials

Our manufacturing operations employ a wide variety of raw materials, including steel, copper, electronic components, aluminum, plastics, cotton, flax and various petroleum-based products.

We purchase raw materials from a large number of independent sources around the world.

Although market forces have at times, includin g in 2023, caused increases in the costs of key raw materials, there have been no raw materials shortages that have had a material adverse impact on our business.

Our manufacturing operations employ a wide variety of raw materials, including steel, copper, electronic components, aluminum, plastics, cotton, flax, films and various petroleum-based products.

We purchase raw materials from many independent sources around the world.

Although market forces have, at times, caused increases in the costs of key raw materials, there have been no raw materials shortages that have had a material adverse impact on our business.

We believe that we will generally be able to obtain adequate supplies of major raw material requirements or reasonable substitutes at acceptable costs.

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Government Contracts

We have agreements relating to the sale of products to government entities, primarily involving products in our Currency segments.

We have agreements relating to the sale of products to government entities, primarily involving products in our Security and Authentication Technologies segment.

As a result, we are subject to various statutes and regulations that apply to companies doing business with the government.

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To remain a premier industrial technology company, it is important that we continue to attract, develop, and retain exceptional talent across our global enterprise.

Our associates are critical to our success, and we are committed to sustaining our culture grounded in our core values:

people matter, do the right thing, trusted partner, innovate for growth, always improving.

The Company has a diverse global workforce located in 32 countries, spanning six continents.

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“Risk Factors.”

Research and Development

Research, development and engineering are of critical importance at Crane NXT to maintain our technological leadership in each segment.

Activities support existing products, providing new features and enhancements, as well as the development of new products.

For further discussion of our research and development activities, please refer to Part II, Item 8 under Note 1, “Nature of Operations and Significant Accounting Policies,” in the Notes to Consolidated and Combined Financial Statements.

Available Information

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We also make our filings available free of charge through our Internet website, as soon as reasonably practicable after filing such material electronically with, or furnishing such material, to the SEC.

Also posted on our website are our Corporate Governance Guidelines, Standards for Director Independence, Crane NXT, Co.

Code of Ethics and the charters and a brief description of each of the Audit Committee, the Management Organization and Compensation Committee and the Nominating and Governance Committee.

Also posted on our website are our Corporate Governance Guidelines, Standards for Director Independence, Code of Business Conduct and Ethics and the charters and a brief description of each of the Audit Committee, the Management Organization and Compensation Committee and the Nominating and Governance Committee.

These items are available in the “Investors – Corporate Governance” section of our website at www.cranenxt.com.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business