Crane NXT, Co.

Good day and thank you for standing by. Welcome to the Crane NXT second quarter 2024 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during a session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I want to hand the conference over to your speaker today, Christina Cristiano, Chief Financial Officer. Please go ahead.

Thank you, Operator, and good morning, everyone. I want to welcome you all to the second quarter 2024 earnings call for Crane NXT. Before we begin, the slides we will reference during this presentation can be accessed via the investor relations section of our website at craneNXT.com. A replay of today's call will also be available on our website. Before we discuss our results, I encourage all listeners to review the legal notice on slide two. which explains the risk of forward-looking statements and the use of non-GAAP financial measures. Additionally, we refer you to the cautionary language at the bottom of our earnings release and in our forms 10-K and 10-Q filings pertaining to forward-looking statements. During the call, we will also be using non-GAAP numbers which are reconciled to the comparable GAAP numbers in the tables at the end of our press release and accompanying slide presentation. both of which are available on our website at craneNXT.com in the investor relations section. With me today is Aaron Sake, our president and chief executive officer. On our call this morning, we will discuss our financial results, provide an update on the OPSEC acquisition and update our 2024 guidance. After our prepared remarks, we will open the call to analysts for questions. Now let me turn the call over to Aaron.

Thank you, Christina, and good morning. We appreciate everyone joining the call today to discuss our second quarter 2024 results. Before we begin, I'd like to take this opportunity to thank our NXT associates around the world for their efforts to deliver solid performance this quarter. Our second quarter performance was in line with our expectations. Sales increased 5% over the prior year, reaching 371 million, driven by the acquisition of OPSEC. I'm very pleased with the operational performance of OPSEC and the progress we're making with integrating the business into NXT. Over the past three months, we've been meeting with many of our customers and the response to the acquisition has been very positive. We have clear line of sight to achieving the commercial and operational synergies that we identified when we announced the acquisition. We've hit the ground running to generate a funnel of new opportunities with our market-leading portfolio of online and physical authentication technologies and started implementing the continuous improvement fundamentals of the Crane business system. We continue to be very excited about OPSEC and what it means for Crane NXT in executing our strategy of providing trusted technology solutions that secure, detect, and authenticate our customers' most valuable assets. In Q2, Crane Currency continued to win new orders, ending the quarter with a record high backlog. We also expanded share with existing customers by issuing 11 new denominations with micro-optics technology. Given the strong backlog and visibility into timing of shipments, we're raising our full-year core sales growth for Currency to 3% to 5%. Additionally, CPI had year-over-year core sales growth for the first time in four quarters. Inventories in the gaming vertical have normalized, and the other verticals within CPI continue to perform as expected, growing amid single digits. Finally, we continue to have a very active M&A pipeline. We ended the quarter with net debt to EBITDA ratio of approximately 1.8 times, positioning us well to further expand and diversify our portfolio with ample M&A capacity. In summary, our year-to-date performance and outlook give us confidence to narrow our adjusted EPS guidance to $4.20 to $4.35. Moving to slide four, in connection with the acquisition of OPSEC, we updated our reportable segments to better align our strategy of expanding our portfolio of market-leading technologies that secure, detect, and authenticate. The security and authentication technology segment consists of the OPSEC and Crane currency businesses. In the CPI segment, we're seeing continued strength in many end markets. This includes vending, where our strong performance reflects new wins with existing customers and productivity initiatives that are improving margins. Additionally, in our services business, we continue to expand our offerings and acquire new customers with several new wins in the quarter driving growth in recurring revenue. I'm also excited that Michael Mahan joined us this quarter as the new president of CPI. In this role, Michael is responsible for driving the CPI growth strategy, accelerating innovation, and leveraging the Crane business system to drive continuous improvement and operational excellence. Michael is quickly acclimating to Crane NXT, visiting customers and traveling to our CPI sites around the world to meet our associates. I'm happy to have him on our team. As mentioned in the announcement of Michael joining, Kurt Gallo will be retiring in early 2025 after 16 years with the company. I'd like to personally thank Kurt for his service and leadership over these many years. Overall, I'm incredibly excited about the future of Crane NXT, the portfolio we're building, and the leadership team we're putting in place. We are well on track to deliver our financial targets this year. We're operating from a position of strength as we continue to execute our strategy to further expand and diversify our portfolio and drive shareholder value. I'm now going to hand the call over to Christina to walk us through our second quarter financial performance, as well as provide more details on our updated 2024 guidance.