Crane NXT, Co. 10-Q

ITEM 1: FINANCIAL STATEMENTS CRANE NXT, CO. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended March 31, (in millions, except per share data) 2025 2024 Net sales $ 330.3 $ 313.6 Operating costs and expenses: Cost of sales 190.1 161.2 Selling, general and administrative 102.9 94.3 Restructuring charges — 2.7 Operating profit 37.3 55.4 Other income (expense): Interest income 0.2 0.6 Interest expense ( 11.5 ) ( 9.9 ) Miscellaneous income, net 2.1 0.6 Total other expense, net ( 9.2 ) ( 8.7 ) Income before income taxes 28.1 46.7 Provision for income taxes 6.4 8.9 Net income attributable to common shareholders $ 21.7 $ 37.8 Earnings per share: Basic $ 0.38 $ 0.66 Diluted $ 0.38 $ 0.66 Average shares outstanding: Basic 57.3 57.0 Diluted 57.9 57.7 Dividends per share $ 0.17 $ 0.16 See Notes to Unaudited Condensed Consolidated Financial Statements. 3 CRANE NXT, CO. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) Three Months Ended March 31, (in millions) 2025 2024 Net income attributable to common shareholders $ 21.7 $ 37.8 Components of other comprehensive income (loss), net of tax Currency translation adjustment 31.1 ( 26.7 ) Changes in pension and postretirement plan assets and benefit obligation, net of tax ( 0.2 ) ( 0.4 ) Other comprehensive income (loss), net of tax 30.9 ( 27.1 ) Comprehensive income attributable to common shareholders $ 52.6 $ 10.7 See Notes to Unaudited Condensed Consolidated Financial Statements. 4 CRANE NXT, CO. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in millions) March 31, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 173.8 $ 165.8 Accounts receivable, net of allowance for credit losses of $ 7.9 as of March 31, 2025 and $ 7.7 as of December 31, 2024 274.0 265.9 U.S. and foreign taxes on income 7.9 8.6 Inventories, net: Finished goods 31.5 19.2 Finished parts and subassemblies 25.1 24.3 Work in process 14.3 14.3 Raw materials 87.4 87.0 Inventories, net 158.3 144.8 Other current assets 62.9 57.4 Total current assets 676.9 642.5 Property, plant and equipment: Cost 620.2 599.8 Less: accumulated depreciation 344.2 327.5 Property, plant and equipment, net 276.0 272.3 Long-term deferred tax assets 0.7 2.2 Intangible assets, net 412.3 419.3 Goodwill 964.5 956.6 Other assets 98.3 93.6 Total assets $ 2,428.7 $ 2,386.5 See Notes to Unaudited Condensed Consolidated Financial Statements. 5 CRANE NXT, CO. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in millions, except per share and share data) March 31, 2025 December 31, 2024 Liabilities and equity Current liabilities: Short-term borrowings $ 263.5 $ 210.0 Accounts payable 87.3 116.6 Accrued liabilities 197.8 211.2 U.S. and foreign taxes on income 15.0 24.6 Total current liabilities 563.6 562.4 Long-term debt 541.1 540.6 Accrued pension and postretirement benefits 19.2 19.4 Long-term deferred tax liability 118.2 119.0 Other liabilities 80.0 80.2 Total liabilities 1,322.1 1,321.6 Commitments and contingencies (Note 12) Equity: Preferred shares, par value $ 0.01 ; 5,000,000 shares authorized — — Common shares, par value $ 1.00 ; 200,000,000 shares authorized 72.4 72.4 Capital surplus 1,710.9 1,719.9 Retained earnings 280.4 268.4 Accumulated other comprehensive loss ( 141.7 ) ( 172.6 ) Treasury stock ( 815.4 ) ( 823.2 ) Total equity 1,106.6 1,064.9 Total liabilities and equity $ 2,428.7 $ 2,386.5 Share data: Common shares issued 72,441,647 72,441,647 Less: Common shares held in treasury 15,084,188 15,244,500 Common shares outstanding 57,357,459 57,197,147 See Notes to Unaudited Condensed Consolidated Financial Statements. 6 CRANE NXT, CO. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended March 31, (in millions) 2025 2024 Operating activities: Net income attributable to common shareholders $ 21.7 $ 37.8 Adjustments to reconcile net income to net cash flows provided by operating activities: Depreciation and amortization 21.6 18.5 Stock-based compensation expense 2.9 2.3 Deferred income taxes ( 0.5 ) 0.2 Cash used for operating working capital ( 61.4 ) ( 50.8 ) Other ( 3.4 ) 1.5 Total (used for) provided by operating activities ( 19.1 ) 9.5 Investing activities: Capital expenditures ( 13.1 ) ( 12.5 ) Settlement of forward contracts ( 0.5 ) — Total used for investing activities ( 13.6 ) ( 12.5 ) Financing activities: Dividends paid ( 9.7 ) ( 9.1 ) Proceeds from stock options exercised 0.6 1.6 Payment of tax withholding on equity awards vested ( 5.6 ) ( 6.2 ) Debt issuance costs ( 0.8 ) — Proceeds from revolving credit facility 106.0 30.0 Repayment of revolving credit facility ( 52.5 ) ( 5.0 ) Repayment of term loan — ( 0.7 ) Total provided by financing activities 38.0 10.6 Effect of exchange rates on cash, cash equivalents and restricted cash 6.7 ( 7.9 ) Increase (decrease) in cash, cash equivalents and restricted cash 12.0 ( 0.3 ) Cash, cash equivalents and restricted cash at beginning of period 1 173.4 227.2 Cash, cash equivalents and restricted cash at end of period 2 $ 185.4 $ 226.9 1. Includes both current and non-current balances of restricted cash. Current restricted cash, included within “Other current assets” in our Unaudited Condensed Consolidated Balance Sheets, was $ 0.8 million and $ 0.0 million as of December 31, 2024, and 2023, respectively. Non-current restricted cash, included within “Other assets” in our Unaudited Condensed Consolidated Balance Sheets, was $ 6.8 million and $ 0.0 million as of December 31, 2024, and 2023, respectively. 2 Includes both current and non-current balances of restricted cash. Current restricted cash, included within “Other current assets” in our Unaudited Condensed Consolidated Balance Sheets, was $ 0.9 million and $ 0.1 million as of March 31, 2025, and 2024, respectively. Non-current restricted cash, included within “Other assets” in our Unaudited Condensed Consolidated Balance Sheets, was $ 10.7 million and $ 6.2 million as of March 31, 2025, and 2024, respectively. See Notes to Unaudited Condensed Consolidated Financial Statements. 7 CRANE NXT, CO. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended March 31, (in millions) 2025 2024 Detail of cash used for operating working capital: Accounts receivable $ 1.5 $ 28.2 Inventories ( 9.8 ) ( 11.7 ) Other current assets ( 5.0 ) ( 14.5 ) Accounts payable ( 27.3 ) ( 16.3 ) Accrued liabilities ( 11.5 ) ( 36.8 ) U.S. and foreign taxes on income ( 9.3 ) 0.3 Total $ ( 61.4 ) $ ( 50.8 ) Supplemental disclosure of cash flow information: Interest paid $ 10.7 $ 9.2 Income taxes paid $ 15.9 $ 8.7 Unpaid capital expenditures $ 1.4 $ 2.0 See Notes to Unaudited Condensed Consolidated Financial Statements. 8 CRANE NXT, CO. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED) (in millions, except share data) Common Shares Issued at Par Value Capital Surplus Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Balance as of December 31, 2024 $ 72.4 $ 1,719.9 $ 268.4 $ ( 172.6 ) $ ( 823.2 ) $ 1,064.9 Net income attributable to common shareholders — — 21.7 — — 21.7 Cash dividends ($ 0.17 per share) — — ( 9.7 ) — — ( 9.7 ) Exercise of stock options of 21,879 shares — — — — 0.6 0.6 Impact from settlement of share-based awards, net of shares acquired — ( 11.7 ) — — 7.2 ( 4.5 ) Stock-based compensation expense — 2.7 — — — 2.7 Changes in pension and postretirement plan assets and benefit obligation, net of tax — — — ( 0.2 ) — ( 0.2 ) Currency translation adjustment — — — 31.1 — 31.1 Balance as of March 31, 2025 $ 72.4 $ 1,710.9 $ 280.4 $ ( 141.7 ) $ ( 815.4 ) $ 1,106.6 (in millions) Common Shares Issued at Par Value Capital Surplus Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Balance as of December 31, 2023 $ 72.4 $ 1,728.1 $ 120.9 $ ( 118.6 ) $ ( 838.8 ) $ 964.0 Net income attributable to common shareholders — — 37.8 — — 37.8 Cash dividends ($0.16 per share) — — ( 9.1 ) — — ( 9.1 ) Exercise of stock options of 57,564 shares — — — — 1.6 1.6 Impact from settlement of share-based awards, net of shares acquired — ( 14.7 ) — — 9.5 ( 5.2 ) Stock-based compensation expense — 2.1 — — — 2.1 Changes in pension and postretirement plan assets and benefit obligation, net of tax — — — ( 0.4 ) — ( 0.4 ) Currency translation adjustment — — — ( 26.7 ) — ( 26.7 ) Balance as of March 31, 2024 $ 72.4 $ 1,715.5 $ 149.6 $ ( 145.7 ) $ ( 827.7 ) $ 964.1 See Notes to Unaudited Condensed Consolidated Financial Statements. 9 NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS Note 1 - Organization and Basis of Presentation Crane NXT, Co. is a leading provider of trusted technology solutions to secure, detect, and authenticate our customers’ most valuable assets. We are comprised of two reporting segments: Crane Payment Innovations (“CPI”) and Security and Authentication Technologies (“SAT”). Our primary end markets include governments, brands, financial insti tutions and a wide range of consumer related end markets including convenience merchandising (vending), retail and gaming. See Note 4, “Segment Results” for the relative size of these segments in relation to the total company (both net sales and total assets). References herein to “Crane NXT,” “we,” “us” and “our” refer to Crane NXT, Co. and its subsidiaries, including when Crane NXT, Co. was named “Crane Holdings, Co.” unless the context implies otherwise. References herein to “Holdings” refer to Crane Holdings, Co. and its subsidiaries prior to the consummation of the Separation unless the context implies otherwise. Separation On April 3, 2023, Holdings was separated (the “Separation”) into two independent, publicly-traded companies, Crane NXT, Co. and Crane Company (“SpinCo”), through a pro-rata distribution (the “Distribution”) of all the issued and outstanding common stock of SpinCo to the stockholders of Holdings. As part of the Separation, we entered into definitive agreements with SpinCo, including a Tax Matters Agreement, which set forth the terms and conditions of the Separation and provided a framework for our relationship with SpinCo following the Separation. See Note 9, “Income Taxes” for more details on the Tax Matters Agreement. Basis of Presentation The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial reporting and, therefore, reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. All such adjustments are of a normal recurring nature. These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Crane NXT Consolidated and Combined Financial Statements and Notes to Consolidated and Combined Financial Statements for the year ended December 31, 2024, previously filed on Form 10-K on February 20, 2025. Due to rounding, numbers presented throughout this report may not add up precisely to totals we provide, and percentages may not precisely reflect the absolute figures. Recent Accounting Pronouncements Recently Issued Accounting Standards In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures which intends to improve the transparency of income tax disclosures. The new standard requires public entities to provide greater disaggregation in their rate reconciliation, including new requirements to present reconciling items on a gross basis within specified categories, to disclose both percentages and dollar amounts, and to disaggregate individual reconciling items by jurisdiction and nature when the effect of the items meets a quantitative threshold. The guidance also includes new requirements to provide users of the financial statements with better information on future cash flow prospects. The standard is effective for all public entities for annual periods beginning after December 15, 2024, on a prospective basis, with a retrospective option, and early adoption permitted for annual financial statements that have not yet been issued. The Company is currently evaluating the potential impact of this standard on its Financial Statements and Disclosures. We do not expect the new standard to have a material impact on our disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses which intends to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, SG&A, and research and development). The standard requires disclosure of these expenses on an interim and annual basis in the notes to the financial statements. The standard is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the potential impact of this standard on its Financial Statements and Disclosures. The Company considered the applicability and impact of other Accounting Standards Updates issued by the Financial Accounting Standards Board (FASB) and determined them to be either not applicable or are not expected to have a material impact on the Company's Unaudited Condensed Consolidated Statements of Operations, Balance Sheets and Cash Flows. 10 NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS Note 2 - Related Parties After the Separation, SpinCo and its subsidiaries became related parties. As of March 31, 2025 and December 31, 2024, we had outstanding receivables from SpinCo and its subsidiaries of $ 3.2 million and $ 0.7 million, respectively, related to indemnification under the Tax Matters Agreement. Note 3 - Acquisitions 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 . The amount paid, net of cash acquired and working capital adjustments, was $ 268.4 million. We utilized $ 210.0 million from our Revolving Facility (as defined in Note 13, “Financing”) and cash on hand to fund the acquisition. OpSec provides authentication solutions, brand and digital content protection serving various commercial brands, government agencies and financial institutions. Allocation of Consideration Transferred to Net Assets Acquired The following amounts represent the preliminary determination of the fair value of identifiable assets acquired and liabilities assumed from our acquisition of OpSec, pending the finalization of certain tangible assets and liabilities to be completed within the measurement period as required by ASC 805. Potential adjustments are not expected to be material in relation to the preliminary values presented below: Net assets acquired (in millions) Total current assets $ 33.6 Property, plant and equipment 17.3 Other assets 6.9 Intangible assets 155.5 Goodwill 133.7 Total assets acquired $ 347.0 Total current liabilities $ 37.4 Other liabilities 41.2 Total assumed liabilities $ 78.6 Net assets acquired $ 268.4 The amount allocated to other assumed liabilities includes a contingent liability of $ 1.5 million related to a prior OpSec acquisition. The amount payable is contingent upon achievement of specific revenue targets and is capped at $ 2.2 million. The contingency conditions expire at the end of 2026, at which point if the contingency conditions have not been met, no payment will occur. The contingent liability is measured at fair value. See Note 14, “Fair Value Measurements” for further details. The amount allocated to goodwill reflects expected sales synergies, manufacturing efficiency and research and development. Goodwill from this acquisition is not deductible for tax purposes. 11 NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS Th e amounts allocated to acquired intangible assets, and their associated weighted-average useful lives which were determined based on the period in which the assets are expected to contribute directly or indirectly to our future cash flows, consist of the following: Intangible Assets (in millions) Intangible Fair Value Weighted Average Life (in years) Intellectual property rights $ 1.5 5.0 Customer relationships 115.5 19.3 Developed technology 36.5 5.7 Backlog 2.0 0.7 Total acquired intangible assets $ 155.5 Supplemental Pro Forma Data OpSec’s results of operations have been included in our financial statements for the period subsequent to the completion of the acquisition on May 3, 2024. The following unaudited pro forma Condensed Consolidated information assumes that the acquisition was completed on January 1, 2023. The unaudited pro forma Condensed Consolidated information is provided for illustrative purposes only and is not indicative of our actual Condensed Consolidated results of operations or Condensed Consolidated financial position. Three Months Ended March 31, (in millions) 2024 Net sales $ 347.4 Net income attributable to common shareholders $ 41.0 Note 4 - Segment Results As of March 31, 2025, we had two reportable segments: Crane Payment Innovations and Security and Authentication Technologies. Assets of the reportable segments exclude general corporate assets which principally consist of cash and tax-related balances. Corporate consists of corporate office expenses including compensation and benefits for corporate employees, occupancy, professional services and other administrative costs. A brief description of each of our segments as of March 31, 2025 is as follows: 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. CPI also provides advanced automation solutions, and processing systems, field service solutions, and remote diagnostics and productivity software solutions. 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. 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. 12 NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS Financial information by reportable segment is set forth below: (in millions) Three months ended March 31, 2025 Crane Payment Innovations Security and Authentication Technologies Total Net Sales $ 202.9 $ 127.4 $ 330.3 Less: Cost of operations 92.3 59.1 Selling and administrative expense 39.8 29.5 Engineering expense 9.6 9.2 Other segment items (a) 11.5 27.2 Segment operating profit $ 49.7 $ 2.4 $ 52.1 Corporate costs ( 14.8 ) Operating profit 37.3 Interest income 0.2 Interest expense ( 11.5 ) Miscellaneous income, net 2.1 Income before income taxes $ 28.1 (in millions) Three months ended March 31, 2024 Crane Payment Innovations Security and Authentication Technologies Total Net Sales $ 209.0 $ 104.6 $ 313.6 Less: Cost of operations 94.4 57.2 Selling and administrative expense 39.9 22.6 Engineering expense 11.6 5.4 Other segment items (a) 10.4 ( 0.8 ) Segment operating profit $ 52.7 $ 20.2 $ 72.9 Corporate costs ( 17.5 ) Operating profit 55.4 Interest income 0.6 Interest expense ( 9.9 ) Miscellaneous income, net 0.6 Income before income taxes $ 46.7 (a) Includes other cost of operations such as manufacturing costs, amortization expenses, shipping and handling costs, and certain overhead expenses, as well as corporate allocations. Three months ended March 31, (in millions) 2025 2024 Capital expenditures: Crane Payment Innovations $ 0.8 $ 1.2 Security and Authentication Technologies 6.5 6.1 Corporate — 0.1 Total $ 7.3 $ 7.4 13 NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS Three months ended March 31, (in millions) 2025 2024 Depreciation and amortization: Crane Payment Innovations $ 7.1 $ 7.4 Security and Authentication Technologies 13.9 10.4 Corporate 0.6 0.7 Total $ 21.6 $ 18.5 (in millions) March 31, 2025 December 31, 2024 Assets: Crane Payment Innovations $ 1,170.8 $ 1,187.1 Security and Authentication Technologies 1,228.5 1,178.2 Corporate 29.4 21.2 Total $ 2,428.7 $ 2,386.5 (in millions) March 31, 2025 December 31, 2024 Goodwill: Crane Payment Innovations $ 616.4 $ 609.1 Security and Authentication Technologies 348.1 347.5 Total $ 964.5 $ 956.6 Note 5 - Revenue Disaggregation of Revenues The following table presents net sales disaggregated by product line for each segment: Three Months Ended March 31, (in millions) 2025 2024 Crane Payment Innovations Products $ 169.9 $ 176.4 Services 33.0 32.6 Total Crane Payment Innovations $ 202.9 $ 209.0 Security and Authentication Technologies Banknotes and Security Products $ 93.4 $ 103.4 Authentication Products and Solutions 34.0 1.2 Total Security and Authentication Technologies $ 127.4 $ 104.6 Net sales $ 330.3 $ 313.6 Remaining Performance Obligations The transaction price allocated to remaining performance obligations represents the transaction price of firm orders which have not yet been fulfilled. As of March 31, 2025, our performance obligations were $ 547.8 million. We expect to recognize approximately 76 % of our remaining performance obligations as revenue in 2025, and 24 % in 2026. 14 NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS Contract Assets and Contract Liabilities Contract assets represent unbilled amounts that typically arise from contracts for customized products or contracts for products sold directly to the U.S. government or indirectly to the U.S. government through subcontracts, where revenue recognized using the cost-to-cost method exceeds the amount billed to the customer. Contract assets are assessed for impairment and recorded at their net realizable value. Contract liabilities represent advance payments from customers. Revenue related to contract liabilities is recognized when control is transferred to the customer. We report contract assets, which are included within “Other current assets” in our Unaudited Condensed Consolidated Balance Sheets, and contract liabilities, which are included within “Accrued liabilities” and “Other liabilities” on our Unaudited Condensed Consolidated Balance Sheets, on a contract-by-contract net basis at the end of each reporting period. Net contract assets and contract liabilities consisted of the following: (in millions) March 31, 2025 December 31, 2024 Contract assets $ 41.6 $ 37.8 Current contract liabilities $ 87.4 $ 71.4 Long-term contract liabilities $ 13.2 $ 13.5 We recognized revenue of $ 24.5 million during the three months ended March 31, 2025, related to contract liabilities as of December 31, 2024. Note 6 - Earnings Per Share Our basic earnings per share calculations are based on the weighted average number of common shares outstanding during the period. Potentially dilutive securities include outstanding stock options, restricted share units, deferred stock units and performance-based restricted share units. The effect of potentially dilutive securities is reflected in diluted earnings per common share by application of the treasury method. Diluted earnings per share gives effect to all potentially dilutive common shares outstanding during the period. Three Months Ended March 31, (in millions, except per share data) 2025 2024 Net income attributable to common shareholders $ 21.7 $ 37.8 Average basic shares outstanding 57.3 57.0 Effect of dilutive share-based awards 0.6 0.7 Average diluted shares outstanding 57.9 57.7 Earnings per basic share $ 0.38 $ 0.66 Earnings per diluted share $ 0.38 $ 0.66 Stock options, restricted share units, deferred stock units and performance-based restricted share units that were excluded from the calculation of diluted earnings per share because their effect is anti‑dilutive were 0.3 million and 0.3 million for the three months ended March 31, 2025, and 2024, respectively. 15 NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS Note 7 - Changes in Accumulated Other Comprehensive Loss The table below provides the accumulated balances for each classification of accumulated other comprehensive income (loss), as reflected on our Unaudited Condensed Consolidated Balance Sheets. (in millions) Pension and Postretirement Benefits (a) Currency Translation Adjustment Total Balance as of December 31, 2024 $ 0.7 $ ( 173.3 ) $ ( 172.6 ) Other comprehensive gain before reclassifications — 31.1 31.1 Amounts reclassified from accumulated other comprehensive loss ( 0.2 ) — ( 0.2 ) Net period other comprehensive (loss) income ( 0.2 ) 31.1 30.9 Balance as of March 31, 2025 $ 0.5 $ ( 142.2 ) $ ( 141.7 ) (a) Net of tax detriment of $ 1.2 million and $ 1.3 million as of March 31, 2025 and December 31, 2024, respectively. The table below illustrates the amounts reclassified out of each component of accumulated other comprehensive loss for the three months periods ended March 31, 2025, and 2024. Amortization of pension and postretirement components has been recorded within “Miscellaneous income, net” on our Unaudited Condensed Consolidated Statements of Operations. Three Months Ended March 31, (in millions) 2025 2024 Amortization of pension components: Prior service costs $ ( 0.2 ) $ ( 0.2 ) Net loss — 0.1 Amortization of postretirement components: Prior service costs — ( 0.2 ) Net gain ( 0.1 ) ( 0.2 ) Total before tax $ ( 0.3 ) $ ( 0.5 ) Tax impact ( 0.1 ) ( 0.1 ) Total reclassifications for the period $ ( 0.2 ) $ ( 0.4 ) Note 8 - Pension and Postretirement Benefits For all plans, the components of net periodic (benefit) expense for the three months ended March 31, 2025, and 2024 are as follows: Pension Postretirement (in millions) 2025 2024 2025 2024 Service cost $ 0.5 $ 0.5 $ — $ — Interest cost 0.4 0.5 0.1 0.1 Expected return on plan assets ( 0.6 ) ( 0.8 ) — — Amortization of prior service cost ( 0.2 ) ( 0.2 ) — ( 0.2 ) Amortization of net loss (gain) — 0.1 ( 0.1 ) ( 0.2 ) Net periodic expense (benefit) $ 0.1 $ 0.1 $ — $ ( 0.3 ) The components of net periodic benefit, other than the service cost component, are included in “Miscellaneous income, net” in our Unaudited Condensed Consolidated Statements of Operations. Service cost is recorded within “Cost of sales” and “Selling, general and administrative” in our Unaudited Condensed Consolidated Statements of Operations. 16 NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS We expect to contribute the following to our pension and postretirement plans: (in millions) Pension Postretirement Expected contributions in 2025 $ 1.6 $ 1.3 Amounts contributed during the three months ended March 31, 2025 $ 0.2 $ 0.9 Note 9 - Income Taxes Effective Tax Rates Our quarterly provision for income taxes is measured using an annual effective tax rate, adjusted for discrete items within the periods presented. Our effective tax rates are as follows: Three Months Ended March 31, 2025 2024 Effective Tax Rate 22.7 % 19.0 % Our effective tax rate for the three months ended March 31, 2025 is higher than the prior year’s comparable period primarily due to the mix of non-U.S. earnings. Our effective tax rate for the three months ended March 31, 2025 is higher than the statutory U.S. federal tax rate of 21% primarily due to the mix of non-U.S. earnings. The Organization for Economic Co-operation and Development (“OECD”) has proposed a global minimum tax of 15% of reported profits (“Pillar 2”) that has been agreed upon by over 140 member jurisdictions including the United States. Pillar 2 addresses the risks associated with profit shifting to entities in low tax jurisdictions. We adopted Pillar 2 in 2024 and the anticipated impact of Pillar 2 on our business for the fiscal year ending December 31, 2025 is approximately $ 2.6 million. 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. As of March 31, 2025 and December 31, 2024, we had gross unrecognized tax benefits of $ 9.4 million included in “Other liabilities” in our Unaudited Condensed Consolidated Balance Sheets. Note 10 - Goodwill and Intangible Assets Changes to goodwill are as follows: (in millions) Crane Payment Innovations Security and Authentication Technologies Total Balance as of December 31, 2024 $ 609.1 $ 347.5 $ 956.6 Currency translation 7.3 0.6 7.9 Balance as of March 31, 2025 $ 616.4 $ 348.1 $ 964.5 As of March 31, 2025, we had $ 412.3 million of net intangible assets, of which $ 45.5 million were intangibles with indefinite useful lives. As of December 31, 2024, we had $ 419.3 million of net intangible assets, of which $ 45.5 million were intangibles with indefinite useful lives. 17 NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS Changes to intangible assets are as follows: (in millions) Three Months Ended March 31, 2025 Year Ended December 31, 2024 Balance at beginning of period, net of accumulated amortization $ 419.3 $ 308.9 Additions 1.4 161.8 Amortization expense ( 11.3 ) ( 47.0 ) Currency translation 2.9 ( 4.4 ) Balance at end of period, net of accumulated amortization $ 412.3 $ 419.3 A summary of intangible assets are as follows: Weighted Average Amortization Period of Finite Lived Assets (in years) March 31, 2025 December 31, 2024 (in millions) Gross Asset Accumulated Amortization Net Gross Asset Accumulated Amortization Net Intellectual property rights 11.0 $ 65.7 $ 16.0 $ 49.7 $ 65.5 $ 15.4 $ 50.1 Customer relationships and backlog 18.9 616.7 305.4 311.3 610.5 293.9 316.6 Developed Technology 6.8 68.4 29.4 39.0 66.4 26.8 39.6 Other 12.1 73.1 60.8 12.3 71.8 58.8 13.0 Total 18.3 $ 823.9 $ 411.6 $ 412.3 $ 814.2 $ 394.9 $ 419.3 Future amortization expense associated with intangible assets is expected to be: (in millions) Remainder of 2025 $ 34.7 2026 46.0 2027 43.6 2028 38.3 2029 37.4 2030 and after 166.8 Note 11 - Accrued Liabilities Accrued liabilities consist of: (in millions) March 31, 2025 December 31, 2024 Contract liabilities $ 87.4 $ 71.4 Employee related expenses 32.2 53.4 Current lease liabilities 11.1 10.6 Accrued interest 6.1 6.6 Warranty 6.3 6.2 Other 54.7 63.0 Total $ 197.8 $ 211.2 18 NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS Note 12 - Commitments and Contingencies We regularly review the status of lawsuits, claims and proceedings that have been or may be asserted against us relating to the conduct of our business, including those pertaining to product liability, patent infringement, commercial, employment, employee benefits, environmental and stockholder matters. We record a provision for a liability for such matters when it is considered probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions, if any, are reviewed quarterly and adjusted as additional information becomes available. If either or both criteria are not met, we assess whether there is at least a reasonable possibility that a loss, or additional losses, may have been incurred. If there is a reasonable possibility that a loss or additional loss may have been incurred for such matters, we disclose the estimate of the amount of loss or range of loss, disclose that the amount is immaterial, or disclose that an estimate of loss cannot be made, as applicable. We believe that as of March 31, 2025, there was no reasonable possibility that a material loss, or any additional material losses, may have been incurred for such matters. Note 13 - Financing Our debt consisted of the following: (in millions) March 31, 2025 December 31, 2024 Revolving Facility $ 263.5 $ 210.0 Total short-term borrowings (a) $ 263.5 $ 210.0 6.55 % notes due November 2036 $ 198.7 $ 198.7 4.20 % notes due March 2048 346.8 346.8 Other deferred financing costs associated with credit facilities ( 4.4 ) ( 4.9 ) Total long-term debt (a) $ 541.1 $ 540.6 (a) Debt discounts and debt issuance costs totaled $ 8.9 million and $ 9.4 million as of March 31, 2025, and December 31, 2024, respectively, and have been netted against the aggregate principal amounts of the related debt in the components of the debt table above, where applicable. Credit Faciliti es - 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”). 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 (the “Delayed Draw”) of £300 million to be used as part of the funding for the De La Rue Authentication Solutions acquisition. The delayed draw term loan is subject to customary closing conditions including the closing of the De La Rue Authentication Solutions acquisition. On March 17, 2023, we also entered into a $350 million, 3-year term loan facility (the “Term Facility”). On December 9, 2024, proceeds from the Revolving Facility were used to repay the outstanding Term Facility. In the three months ended March 31, 2025, we drew down $ 106.0 million, and repaid $ 52.5 million on our Revolving Facility. The Revolving Facility allows us to borrow, repay and re-borrow funds from time to time prior to the maturity of the Revolving Facility without any penalty or premium, subject to customary borrowing conditions for facilities of this type and the reimbursement of breakage costs. Interest on loans advanced under the Credit Agreement accrues, at our option, at a rate per annum equal to (1) adjusted term Secured Overnight Financing Rate (SOFR) plus a credit spread adjustment of 0.10 % for the applicable interest period plus a margin ranging from 1.50 % to 2.25 % or (2) a base rate plus a margin ranging from 0.50 % to 1.25 %, in each case, with such margin as determined by the lower of corporate family credit ratings issued by Moody’s and S&P (the “Ratings”) and our total net leverage ratio. We are required to pay a fee on undrawn commitments under the Revolving Facility at a rate per annum that ranges from 0.20 % to 0.35 %, based on the lower of the Ratings and our total net leverage ratio. The Credit Agreement contains customary affirmative and negative covenants for credit facilities of this type, including limitations on our and our subsidiaries with respect to indebtedness, liens, mergers, consolidations, liquidations and dissolutions, sales of all or substantially all assets, transactions with affiliates, investments, hedging arrangements and amendments to our organizational documents or to certain subordinated debt agreements. As of the last day of each fiscal quarter, our total net leverage ratio cannot exceed 3.50 to 1.00 (provided that, at our election, such maximum ratio may be increased to 4.00 to 1.00 for specified periods following our consummation of certain material acquisitions) and our minimum interest coverage ratio must be at least 3.00 to 1.00. The Credit Agreement also includes customary events of default, including failure to pay principal, interest or fees when due, failure to comply with covenants, any representation or warranty made by us or any of our material subsidiaries being false in any material respect, default under certain other material indebtedness, certain insolvency or receivership events affecting us and our material subsidiaries, certain ERISA events, material judgments and a change in control, in each case, subject to cure periods and thresholds where customary. 19 NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS Note 14 - Fair Value Measurements The following tables provide information regarding the Company’s assets and liabilities measured at fair value as of March 31, 2025, and December 31, 2024. March 31, 2025 (in millions) Location on Consolidated Balance Sheets Active Markets for Identical Assets and Liabilities Level 1 Other Observable Inputs Level 2 Unobservable Inputs Level 3 Total Fair Value Assets Foreign exchange contract not designated as hedging instrument 1 Accounts Receivable $ — $ 0.3 $ — $ 0.3 Liabilities Foreign exchange contract not designated as hedging instrument 1 Accrued Liabilities $ — $ 0.4 $ — $ 0.4 Long-term debt Long-term debt $ — $ 422.3 $ — $ 422.3 Performance-based restricted share units Other Liabilities $ 0.7 $ — $ — $ 0.7 Contingent Liability Other Liabilities $ — $ — $ 1.5 $ 1.5 1 Notional value of $ 38.9 million December 31, 2024 (in millions) Location on Consolidated Balance Sheets Active Markets for Identical Assets and Liabilities Level 1 Other Observable Inputs Level 2 Unobservable Inputs Level 3 Total Fair Value Assets Foreign exchange contract not designated as hedging instrument 1 Accounts Receivable $ — $ 0.1 $ — $ 0.1 Liabilities Foreign exchange contract not designated as hedging instrument 1 Accrued Liabilities $ — $ 3.1 $ — $ 3.1 Long-term debt Long-term debt $ — $ 430.1 $ — $ 430.1 Performance-based restricted share units Other Liabilities $ 1.6 $ — $ — $ 1.6 Contingent Liability Other Liabilities $ — $ — $ 1.5 $ 1.5 1 Notional value of $ 65.0 million 20 NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS Note 15 - Restructuring 2024 Restructuring - In the first and fourth quarters of 2024, in response to challenging industry conditions, we initiated workforce reductions in CPI, incurring $ 10.1 million of cumulative severance charges, net through March 31, 2025. We expect to substantially complete the restructuring program in 2025 and do not expect to incur significant additional costs. 2022 Restructuring - In the fourth quarter of 2022, in response to economic uncertainty, we initiated workforce reductions in CPI, incurring $ 6.7 million of cumulative Restructuring charges through March 31, 2025, of which $ 5.8 million related to severance and $ 0.9 million related to other costs. This restructuring program has been completed. The following table summarizes the accrual balances related to these restructuring charges by program: (in millions) 2024 Restructuring 2022 Restructuring Total Severance: Balance as of December 31, 2024 (a) $ 7.2 $ 0.2 $ 7.4 Utilization ( 3.2 ) ( 0.2 ) ( 3.4 ) Balance as of March 31, 2025 (a) $ 4.0 $ — $ 4.0 (a) Included within “Accrued Liabilities” in the Unaudited Condensed Consolidated Balance Sheets. Note 16 - Subsequent Events On May 1, 2025, we acquired De La Rue plc’s authentication business, De La Rue Authentication Solutions (“DLR”) for a base purchase price of £ 300 million on a cash-free and debt-free basis, subject to customary adjustments reflecting DLR’s net working capital, cash, the assumption of certain debt-like items, and DLR's transaction expenses. We utilized our Delayed Draw to fund the acquisition. 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. 21 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS