Crane Co

NYSE:CR

Earnings Call Transcript 2022-Q1

[Operator]

Greetings. Welcome to Crane Co. First Quarter 2022 Earnings Call. [Operator Instructions] Please note this conference is being recorded.

I will now turn the conference over to Jason Feldman, Vice President of Investor Relations. Thank you. You may begin.

[Jason Feldman, VP-IR]

Thank you, operator and good day everyone. Welcome to our first quarter 2022 earnings release conference call. I'm Jason Feldman, Vice President of Investor Relations. On our call this morning, we have Max Mitchell, our President and Chief Executive Officer, and Rich Maue, our Senior Vice President and Chief Financial Officer. We will start off our call with a few prepared remarks, after which we will respond to questions.

Just a reminder that the comments we make on this call may include some forward-looking statements. We refer you to the cautionary language at the bottom of our earnings release and also in our annual report 10-K and subsequent filings pertaining to forward-looking statements. Also during the call, we'll be using some non-GAAP numbers, which are reconciled to the comparable GAAP numbers and tables at the end of our press release and in the accompanying slide presentation, both of which are available on our website at www.craneco.com in the Investor Relations section.

Now let me turn the call over to Max.

[Max Mitchell, President and CEO]

Thank you, Jason, and good morning everyone. Thanks for joining the call today.

Another strong quarter with solid results across the board. First quarter adjusted EPS from continuing operations was $1.81, up 15% from last year. We delivered core sales growth of 5% with a number of strong leading indicators reflected in core order growth of 12% and core backlog growth of 16% compared to last year. Further evidence of our ability to drive profitable growth, despite persistent inflationary pressures, ongoing supply and logistics issues and continued COVID disruptions globally.

Overall, the environment is similar to date to what we saw and described on our last earnings call, generally not improving and not significantly worsening. While issues tend to change and evolve from various disruptions that continue to occur on a regular basis, it's a stable environment of ongoing challenges that are almost predictably unpredictable, if you will.

As we watch global events and our operating environment carefully at this point, we still believe that we planned appropriately and that our current guidance is consistent with the demand conditions and supply chain constraints, we are seeing today and we expect a similar set of conditions to persist throughout the year.

Building on the strength of our operating results, we also had some other notable developments we announced on March 30 at our Annual Investor Day event, which is available for streaming at craneco.com for those who've missed it. Specifically, we announced that we are pursuing a plan to separation of our business into two independent publicly traded companies.

We believe that separation will unlock significant shareholder value and better position both companies for accelerating growth moving forward. The separation work streams are well underway and we are making significant progress. Given that this is a clean separation along segment lines, there is no disruption in our businesses with nearly all of the necessary work conducted by the corporate team along with our outside advisors.

The businesses continue to execute well every day and their primary focus is growth and that's where I'm spending most of my time and heavily engaged to help drive accelerating growth, both organically and inorganically and ensuring these businesses are structured and positioned for that focus. You heard in many - you heard about many of the opportunities we have ahead of us at last month's Investor Day event, but there are many others that we'll be in a position to discuss in the quarters ahead. So stay tuned.

A couple of other items to mention. Earlier this month, we completed our $300 million share repurchase program, buying back a total of 2.9 million shares over the last several months. That program reflects our view that our stock remains significantly undervalued and was a good use of our strong balance sheet, given the relative valuation of our stock compared to potential acquisitions.

And last night, we announced that we have signed an agreement to divest our Crane Supply business. Crane supply is a leading distributor of pipe valves and fittings for commercial and industrial applications. It's a very strong business with industry leading margins and returns and an exceptional team.

However, as a distribution business and as part of our broader portfolio shaping efforts, it is now not aligned with our core growth strategy as a manufacturer of highly engineered products nor with our target long-term growth profile.

This transaction will further streamline and focus our Process Flow Technologies business on the manufacturing of highly engineered products for its core target markets; chemical, pharmaceutical, water, wastewater and general industrial.

I wish to thank our Crane Supply team for their support, dedication and their understanding regarding this decision and a personal shout out to our President, Tom Frazer, who celebrated 40 years with Crane, April 12 and who is staying on to lead this business for the [Dechaine] Group, an outstanding distributor in Canada that we're very pleased to have the team become a part of.

So for now, a few highlights of what you expect in each of the post separation businesses. At Crane NXT, the CEO search is underway, evaluating both internal and external candidates. The new CEO will have an incredibly strong base business to work with, one with significant technological differentiation, world-class manufacturing capabilities and an extremely strong financial profile with substantial free cash flow generation. This is also a business that has a proven track record of growth.

Starting with that strong core, remember, this is a business with 40% recurring sales, contractually locked in for expected periods or repeating for many years, a sole source relationship with the U.S. government on the currency side for more than 100 years, a service business with annual contracts and a 98% renewal rate, repeat international customers with our technology specified for multiyear printing contracts and connectivity managed services in cashless processing, and the core business supported by strong secular trends, security throughout NXT's offerings, any counterfeit for cash and consumer products, secured cashless transaction networks and physical security of currency and automation and productivity solutions to address labor costs and availability.

Across the business, the organic growth opportunities are enormous and we compete in a fast-moving and dynamic market with new opportunities emerging frequently. In retail, we're seeing a proliferation of self-checkout solutions from expansion of traditional self-checkout systems, where we are critical provider of components to the largest OEMs to customize customer facing solutions, optimized for specific retailer's needs and requirements.

We also have our own expanding line of customer-facing systems and solutions. And we are seeing entirely new categories of retailers look for automation. As long as the solution involves the payment transaction, we play a potential role and this part of the business continues to grow rapidly.

Service has been a major growth area for us since the 2019 acquisition of Cummins Allison, where we are expanding our capabilities with a 400-person strong U.S. technician based and offering a turnkey solution with a strong recurring revenue model for customers across retail, gaming and financial services.

Cashless payment, where we have a strong and growing presence in both vending and gaming and increasingly seeing opportunities across new markets, including EV charging, where we are gaining significant traction, as well as next-generation vending service pay kiosks and various other unattended payment locations.

At currency, we see continued opportunities for banknote growth, leveraging our micro optic security technology, which is unparalleled. This differentiator continues to win us new business both for standalone security products, but also for banknote printing and product authentication, leveraging that micro-optic technology for consumer product authentication. We continue to make significant progress signing new partners and converting customers.

There are also additional opportunities where we have begun preliminary work but aren't yet in a position to discuss further involving data analytics, broader plays across the Authentication space, Digital Payments leveraging our existing technology and other areas as well.

In addition to organic opportunities, this is a business with a long and successful track record with M&A, a robust pipeline of acquisition opportunities to strengthen the core and a growing list of potential acquisitions across a number of adjacencies. We will continue to share more developments at Crane NXT as we can over the course of the year.

At Crane Co., where Rich and I will continue to be part of the business post separation, there are equally exciting opportunities. This is a business that should deliver solid mid-single-digit core sales growth across the cycle with strong operating leverage driving double-digit core EPS growth before capital deployment, paired with a strong balance sheet to create additional value through acquisitions and capital return, too strong, technology-driven industrial businesses with large attractive end markets.

At Aerospace Electronics, we have a clear line of sight to 7% to 9% sales compound average growth rate for the next decade, driven by continued post COVID commercial aerospace recovery, where we have substantial content on all of the high volume in-production aircraft platforms, as well as significant growth from multiyear defense contracts, we have already won that will be ramping up over the next several years.

And with many new emerging opportunities, given our technology readiness in key growth areas, including high power conversion and sensing, as well as thermal and fluid management, well positioned with the right technology for the solutions that are still in the early-state - early stages of development and adoption, hybrid and all-electric military vehicles, alternative propulsion aircraft, urban vertical takeoff and landing aircraft, low earth orbit satellite constellations, next generation radar applications. An incredibly strong business well positioned for accelerating growth.

In Process Flow Technologies, years of realigning the portfolio and manufacturing footprint, this business is well positioned for growth and very focused on manufacturing highly engineered solutions for the most demanding applications in chemical, pharmaceutical, water, wastewater and general industrial applications.

For an industry that is typically slow to adopt new technologies and solutions, it's been amazing to see the success this team has had, a rapidly increasing new product vitality, new to the world product designs for chemical applications, continued expansion of the product portfolio, both organically and through acquisitions and increasingly dynamic business driving accelerating growth with margins at record levels and positioned for further expansion.

I'm getting goosebumps just thinking about this Rich. You?

[Rich Maue, SVP and CFO]

100%.

[Jason Feldman, VP-IR]

I think we're feeling. I got to take a breath. Overall, we have a very exciting story with continued appreciation in the market and we believe that all of our actions confirm our unwavering commitment to driving shareholder value. While we work towards the separation over the next year, you can expect us to operate the business as we always have, but with an even more pronounced focused on driving growth.

We will continue to deliver differentiated and consistent, excellent execution. We are investing and driving growth more effectively than ever before. We remain fiscally disciplined and have a rigorous process for all capital allocation decisions, and all of these efforts are supported and enabled by the cadence and discipline of the Crane Business System, an exciting set of opportunities for these businesses, both before and after the separation.

At this point, I'll turn it over to Rich for some additional financial commentary.

[Rich Maue, SVP and CFO]

Thank you, Max. And good morning everyone. Even in these challenging times, we continue to drive profitable growth. And my thanks to our leadership teams and associates globally for their consistent focus on driving sustainable value creation for all our stakeholders.

Moving to segment comments, that will compare the first quarter of 2022 to 2021 on a continuing operations basis, excluding special items as outlined in our press release and slide presentation. At Aerospace & Electronics, sales of $157 million increased 2% compared to last year. Segment margins improved 100 basis points to 17.9%.

In the quarter, total aftermarket sales continued to strengthen, increasing 12% compared to last year. Commercial aftermarket sales grew 47% year-over-year, driven by both replenishment spares, initial provisioning and repair and overhaul. Defense aftermarket sales declined 27% based on program timing and some temporary shipping delays.

Commercial OE sales increased 7% compared to the prior year, driven by higher build rates and shipments, particularly for the 737 MAX. Defense OE sales declined 9% due to program timing and some transient material availability constraints.

As we discussed last month at our Investor Day event, we are very excited about the outlook for this business and continue to have confidence in a 7% to 9% sales CAGR over the next decade. Our confidence in this outlook is based on our differentiated technology, a continued post-COVID commercial aerospace recovery and the numerous major multi-year programs, particularly on the defense side of the business that we have already won.

For this year, specifically, demand is very strong and can support sales, well above our current guidance. In the first quarter, we had solid performance that improved progressively with an extremely strong month of March.

However, material availability is creating uncertainty and unpredictability about the timing and cadence of sales and earnings. We currently expect a slight sequential improvement in sales next quarter with adjusted operating profit at similar levels before both pick up more substantially in the second half of the year with good operating leverage.

Process Flow Technologies sales of $311 million increased 8%, driven by a 10% increase in core sales, partially offset by a 2% impact from unfavorable foreign exchange. Process Flow Technologies operating profit increased by 31% to $51 million. Operating margins increased 290 basis points to 16.3%, primarily reflecting the higher volumes, strong execution in productivity and stronger pricing net of inflation.

Sequentially FX-neutral backlog increased 5% with FX-neutral orders up 7% compared to the prior year. FX-neutral backlog increased 16% and FX-neutral core orders increased 10%. Continued strong leading indicators suggesting that we will continue to see strong growth throughout 2022 and beyond, led by our process business where overall order rates have already recovered to level similar to 2019. The strength is being led by the chemical, pharmaceutical and general industrial end markets.

For Q2, depending on the timing of the Crane Supply transaction closing, we will likely only have that business for part of the quarter. Reported sales are likely to decline sequentially at Process Flow Technologies.

Absent the Crane Supply and divestiture, we expect a modest sequential increase in sales. Remember that Q2 and Q3 are the seasonally strongest for sales in this business, but with a modest sequential decline in margins reflecting mix and project timing. We expect second half margins to be stronger than the first half.

At Payment & Merchandising Technologies sales of $330 million in the quarter declined 1.5% compared to the prior year as expected, given tough comparisons in the quarter, driven by 3% of unfavorable foreign exchange, partially offset by 1% of core sales growth. Segment operating profit declined slightly to $84 million.

Operating margins were flat compared to the prior year at an impressive 25.3%, notwithstanding the decline in sales. Continued strong performance again at Crane Currency and with Crane Payment Innovations now recovering and contributing meaningfully.

Currency markets are behaving as anticipated and previously communicated with the U.S. government business fairly stable at strong levels and the international business down modestly from record levels last year. At CPI, strength continues to be led by retail and gaming with the vending vertical improving as well.

For the segment overall, we expect a slight sequential decline in sales next quarter, following a stronger than expected first quarter. We then expect to see a pickup in the second half. We continue to expect margins to moderate starting next quarter as the business reverts to a normal mix.

Moving now to more detail on our total company results and guidance. Free cash flow was negative $62 million in the quarter as expected. This reflects our normal seasonality with the first quarter often resulting in a use of cash, higher compensation payments this year, reflecting our strong results in 2021 and an increase in working capital related to the market recovery. Our balance sheet is in extremely good shape.

By the end of the year, we expect adjusted gross leverage toward the bottom end of the 2 to 3 times Moody's gross debt to EBITDA target range for our current credit rating. We also announced last night that we have completed our previously announced $300 million share repurchase program, buying back approximately 2.9 million shares over the last six months.

Turning to guidance. We are maintaining our adjusted EPS range of $7 to $7.40 for the full year. The impact of the Crane Supply and divestiture will depend on exactly when the transaction closes, but we still expect to be able to achieve our full year guidance after that transaction. Said another way, we expect to lose approximately $0.25 of EPS during the balance of this year, but we are holding guidance. So we are effectively raising our operational guidance for the year.

From a cadence of earnings perspective and timing through the quarters, it is important to remember that our guidance was always fairly balanced throughout the year without much back-end weighting. Just as we said last quarter, we do expect a very modest acceleration of earnings sales in EPS from the first half into the second half of the year.

For the second quarter, we expect a modest sequential decline in EPS compared to the first quarter, driven by two factors. First, based on our estimate of the timing of the Crane Supply transaction, we expect about $0.06 of lower EPS from Crane supply in the second quarter compared to the first quarter.

Second, we had higher shipments during the first quarter than we expected, particularly at Crane Currency and to a lesser degree of Process Flow Technologies and Crane Payment Innovations due to logistics and supply chain. That timing shifted between $0.07 and $0.10 from the second quarter into the first quarter as part of the predictable - unpredictability of the supply chain and general ongoing challenges.

But the first half in total is consistent with our original expectations. Again Q2 modest sequential decline in EPS before picking up again in Q3. So overall second half earnings will be slightly higher than the first half, about a 52% to 48% split.

And in the second half, we expect the third quarter to be the strongest of the year with the fourth quarter seasonally a little slower. So a solid outlook and even more exciting times ahead as we enter 2023 and complete the separation. We are all energized at the progress that has been made to date and the opportunities that we are unlocking and pursuing every day.

Operator, we are now ready to take our first question.

[Operator]

[Operator Instructions] Our first question is from Damian Karas with UBS. Please proceed.

[Max Mitchell, President and CEO]

Good morning, Damian.

[Damian Karas, UBS]

Hi, good morning everyone.

[Max Mitchell, President and CEO]

Morning.

[Damian Karas, UBS]

And Max be careful those goosebumps are contagious.

[Max Mitchell, President and CEO]

I hope so.

[RichMaue]

You've got them too.

[Damian Karas, UBS]

Oh, yes. Got them. Just here and you talk about them. Jokes aside. So I wanted to ask you about the Crane Supply sale here. So, Rich, I think you said that effectively you raised the guidance by a quarter. So just curious kind of what you guys plan is? How long do you think - thinking about next year, how long it's going to maybe take you to kind of offset some of that EPS, which you're setting? And are you expecting any dis-synergies related to this divestiture?

[RichMaue]

So, no. We don't expect any dis-synergies. So I'll start there from a divestiture at all. Frankly, it's a fairly clean divestiture and with very little in the way of anything really from a dis-synergy perspective. As we think about next year and implications to our earnings and replacing, what I would point to is the fact that we're actually doing better pre-divestiture than we thought as we were moving through the balance of this year.

So - hence our ability to hold guidance in the current period, so as we move forward and we look at the growth opportunities that we have across all of PFT, when thinking about the NPD initiatives that Alex spoke about during our Investor Day and all that we're doing with respect to channels and so forth, we feel pretty good about a higher growth profile, frankly, for the overall segment, right? So this is a business that historically has been slightly lower than GDP growth profile and that's not our expectation for the remainder of the PFT business.

[Max Mitchell, President and CEO]

It's also, Damian, we continue to work actively on inorganic opportunities to potentially offset with the proceeds and we're also looking at a number of organic opportunities where we might be able to redeploy some more capital and accelerate growth further as well.

[Damian Karas, UBS]

Okay, great. And then regarding the separation. I appreciate the comments in the press release about the Engineered Materials status. But what would you say is the chance that you can't remedy these DOJ issues? And should the deal ultimately not get approved, now, what's your plan? And how should we think about the implications for the separation?

[Max Mitchell, President and CEO]

Yes. So right now, I think we have high confidence that it's going to go through. It's going to take some time. We're working with Versa Tech. They have a lead on this and we feel we build a strong case together. We feel high probability that we will seek appropriate remedies. It's very, very minor overlap that we feel strongly will get the eventual approval. So I'm not even really that worried about it, so don't think any countermeasures are necessary at this time. Damian, I feel pretty good.

[Operator]

Our next question is from Matt Summerville with D.A. Davidson. Please proceed.

[Matt Summerville, D.A. Davidson]

Thanks. Couple of questions and morning. First maybe with CPI. Can you talk about what the recurring revenue and operating profit run rate is today versus prior peak? And then can you take a few seconds just to maybe size up the EV charging infrastructure opportunity you guys are looking at?

[RichMaue]

Yes. On the recurring revenue, I'd have to look at that a little bit more carefully, but it's going to be a little bit challenging because on the CPI side, a good chunk of the recurring revenue is Cummins Allison, which we didn't own at the time of the prior peak 2019. But that didn't really actually tail off because of COVID, almost at all. And some of the other elements I may have to get back to you on that. I don't - we don't have that information handy, but on EV charging...

[Matt Summerville, D.A. Davidson]

Do we sized up the market at Investor Day.

[RichMaue]

I got to get that number of Matt. But I can tell you that we just - I just looked at our weekly report this morning and we have an order in Europe with an OEM, which I won't disclose, but we're making progress already in the space. I owe you that on the size, again, I can't recall if we highlighted that on Investor Day.

[Matt Summerville, D.A. Davidson]

No problem. I can always check back in. And then as my follow-up question, can you talk about where you're at with obviously it's favorable given we have a margin numbers, you guys are putting up, but where are you at price versus cost? How much price are you taking in '22 and maybe how did that compare versus '21? Thank you.

[RichMaue]

Yes. Well, what I would say, Matt, is in the quarter, we think of it as low to mid-single digits depending on the business. So we were - it's variable across the different groups we have, whether it's Payment, Process Flow Technologies or A&E, but very solid progress across the board. We were price cost accretive in the quarter as well.

So I would expect that to continue as we move through the balance of the year and see that sort of mid-single digit price achievement through the balance of the year, but again it's going to be mixed across the business, some a little bit stronger than that, some just a little bit less than that. But without a doubt, more than covering not just material inflation, our teams are very, very focused on ensuring we're covering what we need to elsewhere in the business, whether it's manufacturing costs, maintenance, you name it, labor costs, highly focused with a strong cadence to ensure that we continue to get price.

[Max Mitchell, President and CEO]

And Jason just highlighted, Matt, that EV charging sites, we called out Investor Day was $200 million, expected to go to $200 million.

[Operator]

Our next question is from Nathan Jones with Stifel. Please proceed.

[Max Mitchell, President and CEO]

Nathan, good morning.

[Nathan Jones, Stifel]

Morning, everyone.

[Max Mitchell, President and CEO]

Nice job on your - I enjoyed reading this.

[Nathan Jones, Stifel]

Thanks. Thanks. I just wanted to follow-up on the guidance with $0.25 coming out guidance maintained, the core revenue growth guidance is the same as it was a quarter ago. So I assume this is coming from better margins. Can you talk about where those margins are improving? Where you think that margins for the year are going to be better than where you thought they were going to be three months ago?

[Max Mitchell, President and CEO]

Yes. I'll let Rich comment on the margins in a second, but also remember I mean there was a two point range on core growth and when I say is that the bias, it's certainly, towards the upper end of that now after the divestiture. So it is coming a little bit from both sides.

[RichMaue]

Yes. And on margins, actually we would - look, we're not prepared to necessarily pick them up, but I would not be surprised if we see stronger margin. Well, we're going to see stronger margin profile, I would say, in Currency, PFC, as well as Aerospace. We're going to see a little bit of upside in each of those as we move for the balance of the year.

[Nathan Jones, Stifel]

And then follow-up question, you've got core growth 4% to 6%. And Rich, you're just saying that mid-single digit price, which accounts for pretty much all of the core growth. Can you talk about where volumes are expected to be up, where volumes are expected to be down and the pathway that CPI is one of the ones where it may be still down and the pathway for that volume to improve as we move forward in the businesses that remain challenged.

[RichMaue]

Sure. So you're right. So volumes for - on a net basis were close to flat in the quarter. So price is certainly a driver in the quarter for us, but it is mixed across the business, when you look. Just remember that in the first quarter last year, our Currency business had an exceptional, I think it was a record performance from a sales perspective.

So there is a significant headwind that we experienced here in the quarter that was netted out in that flat number. Talk - you can think of it as high teens volume decline in currency year-over-year. So a lot of that being offset by strength that we did in fact see in our payment business, the legacy CPI business, mid-single-digit type growth that we saw there, as well as in our Process Flow Technologies business. So Process Flow grew at about 10% core growth in the quarter and roughly half of that was - well, I think is split between both price and volume.

So nice overall growth in two of our largest businesses. We continue to expect to see now going forward, to your point, further momentum in our Crane Payment Innovations business, CPI. We expect further momentum as well as in our PFT business, in particular, as we move through the balance of the year. And then also at Aerospace & Electronics, in particular, as we move into the later portion of the year, mostly in the fourth quarter. So that's where it's going to come from as we move forward.

[Operator]

[Operator Instructions] Our next question is from Kristine Liwag with Morgan Stanley. Please proceed.

[Max Mitchell, President and CEO]

Good morning, Kristine.

[Unidentified Analyst]

This is Justin on for Kristine. Good morning.

[Max Mitchell, President and CEO]

Hey, Justin. How are you?

[RichMaue]

Hello, Justin.

[Unidentified Analyst]

Good. Thanks. Just a question on the supply chain. Can you maybe characterize further the disruptions, you're still seeing across the business? And then specifically what if any exposure do you have to Russian titanium? Thanks.

[Max Mitchell, President and CEO]

Yes. Very little on the Russian titanium. So let's just leave it at that. On supply chain in general, Justin, I mean it's - on the electrical components, whether it's actives, passives, resistors, I mean, you name it. It's just continues to be tight and you've got to work all those issues very, very hard. It continues to be spotty. The lead times continue to extend, our teams are working at. So, on any given day, there's just a lot of ongoing disruption. I don't see it getting significantly better. We don't see it getting significantly worse. So in CPI, A&E, it tends to be more of electrical components.

In other segments we are so diversified. I mean we're in resins. You see it and everywhere from resins to adhesives to every commodity. I really think the supply chain is in many cases down to the raw material level, like you were just hitting it from a titanium standpoint. A year ago, there was a series of disruptions that we're all living through.

Now it's become a continuous state with very little buffer in the supply chain and surprises the second and third level tier that you can expect as well. Raw material, I mean, who would have thought Neon in the Ukraine was a major producer for chip production and all these things that we're learning. So from disruption in Ukraine to China lockdowns, logistics challenges to continue even though we read about some of the ships off the port becoming fewer, this is going to be worsen again a bit in a few months. I think because of the China lockdowns.

On the Process Flow Technology side, it tends to be around castings, and it's not so much casting availability. We're seeing some improvement in our supply chain catching up, but it's logistics and the lead time still which is quite excessive, so trying to plan around that. So again more of the same and with the global environment that is taking place right now from Ukraine, China locked down, inflationary pressures, global dislocations, it's just - our planning and expectation is this continues through the balance of the year. Hope that helps.

[Operator]

And that will conclude our question and answer session. I would like to turn the conference back over to Max Mitchell for closing comments.

[Max Mitchell, President and CEO]

Thank you, operator. Another quarter with solid performance further steps on our path of continued transformation, portfolio shaping, divestitures of non-strategic assets and continued investment in higher growth target markets. And now with the planned separation to position our businesses for further acceleration of growth. It's an exciting path forward, and I look forward to sharing updates with you over the next several quarters.

As the late great Sydney 48 one set, the journey has been incredible from its beginning, very fitting for us today and our journey is not over. We're just getting started and I'm incredibly excited about our opportunities to drive continued shareholder value in the quarters and years ahead. Thank you for your interest in Crane and have a great day.

[Operator]

Thank you. This does conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.