cxt-20230630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Mark One:


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from to

Commission File Number: 1-1657

CRANE NXT, CO.

(Exact name of registrant as specified in its charter)



Delaware						88-0706021
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


950 Winter Street 4th Floor	Waltham	MA	02451
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: 610-430-2510

(Not Applicable)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $1.00	CXT	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non–accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

(check one):

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the issuer’s classes of common stock, as of July 31, 2023

Common stock, $1.00 Par Value – 56,796,932 shares

Crane NXT, Co.

Table of Contents

Form 10-Q

Page

Part I - Financial Information

Item 1.

Financial Statements

Consolidated and Combined Condensed Statements of Operations

Page 3

Consolidated and Combined Condensed Statements of Comprehensive Income

Page 4

Consolidated and Combined Condensed Balance Sheets

Page 5

Consolidated and Combined Condensed Statements of Cash Flows

Page 7

Consolidated and Combined Condensed Statements of Changes in Equity

Page 9

Notes to Consolidated and Combined Condensed Financial Statements

Page 10

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Page 23

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Page 32

Item 4.

Controls and Procedures

Page 32

Part II - Other Information

Page 33

Page 33

Unregistered Sales of Equity Securities and Use of Proceeds

Page 33

Item 3.

Defaults Upon Senior Securities

Page 33

Item 4.

Mine Safety Disclosures

Page 33

Page 33

Page 34

Page 35

PART I: FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

CRANE NXT, CO. AND SUBSIDIARIES

CONSOLIDATED AND COMBINED CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions, except per share data)	2023		2022		2023		2022
Net sales	$	352.4	$	334.0	$	681.5	$	666.6
Operating costs and expenses:
Cost of sales	184.0		182.8		358.4		361.9
Selling, general and administrative	99.6		77.8		188.4		154.4



Operating profit	68.8		73.4		134.7		150.3
Other income (expense):
Interest income	0.2		0.1		0.4		0.1
Interest expense	(14.1)		(10.5)		(24.5)		(21.0)
Related party interest expense	—		(3.6)		(2.5)		(7.3)
Miscellaneous income, net	1.0		2.1		2.4		2.9
Total other expense, net	(12.9)		(11.9)		(24.2)		(25.3)
Income before income taxes	55.9		61.5		110.5		125.0
Provision for income taxes	12.7		12.7		23.6		26.7




Net income attributable to common shareholders	$	43.2	$	48.8	$	86.9	$	98.3

Earnings per share:


Basic	$	0.76	$	0.86	$	1.53	$	1.73
Diluted	$	0.75	$	0.86	$	1.51	$	1.73





Average shares outstanding:
Basic	56.8		56.7		56.8		56.7
Diluted	57.4		56.7		57.4		56.7

Dividends per share	$	0.14	n/a		$	0.14	n/a

See Notes to Unaudited Consolidated and Combined Condensed Financial Statements.

CRANE NXT, CO. AND SUBSIDIARIES

CONSOLIDATED AND COMBINED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions)	2023		2022		2023		2022
Net income attributable to common shareholders	$	43.2	$	48.8	$	86.9	$	98.3
Components of other comprehensive income (loss), net of tax
Currency translation adjustment	(3.1)		(46.1)		1.8		(62.2)
Changes in pension and postretirement plan assets and benefit obligation, net of tax	(0.5)		(0.2)		(1.0)		(0.4)
Other comprehensive income (loss), net of tax	(3.6)		(46.3)		0.8		(62.6)
Comprehensive income attributable to common shareholders	$	39.6	$	2.5	$	87.7	$	35.7

See Notes to Unaudited Consolidated and Combined Condensed Financial Statements.

CRANE NXT, CO. AND SUBSIDIARIES

CONSOLIDATED AND COMBINED CONDENSED BALANCE SHEETS

(UNAUDITED)


(in millions)	June 30, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	276.9	$	230.7
Accounts receivable, net of allowance for credit losses of $6.5 as of June 30, 2023 and $6.1 as of December 31, 2022	200.9		205.1
Inventories, net:
Finished goods	40.1		26.2
Finished parts and subassemblies	23.5		23.0
Work in process	12.6		12.7
Raw materials	97.6		83.7
Inventories, net	173.8		145.6
Other current assets	49.6		41.9
Total current assets	701.2		623.3
Property, plant and equipment:
Cost	531.4		521.5
Less: accumulated depreciation	280.1		259.9
Property, plant and equipment, net	251.3		261.6
Long-term deferred tax assets	4.3		6.3
Other assets	77.9		56.7
Intangible assets, net	325.0		344.9
Goodwill	835.3		836.6

Total assets	$	2,195.0	$	2,129.4

See Notes to Unaudited Consolidated and Combined Condensed Financial Statements.

CRANE NXT, CO. AND SUBSIDIARIES

CONSOLIDATED AND COMBINED CONDENSED BALANCE SHEETS

(UNAUDITED)


(in millions, except per share and share data)	June 30, 2023		December 31, 2022
Liabilities and equity
Current liabilities:
Short-term borrowings	$	9.4	$	299.7
Accounts payable	100.8		109.6
Accrued liabilities	198.5		204.2
U.S. and foreign taxes on income	8.2		17.9
Total current liabilities	316.9		631.4
Long-term debt	829.6		545.1
Accrued pension and postretirement benefits	20.4		21.1
Long-term deferred tax liability	105.1		109.5
Other liabilities	67.8		38.5

Total liabilities	1,339.8		1,345.6
Commitments and contingencies (Note 11)
Equity:
Preferred shares, par value $0.01; 5,000,000 shares authorized	—		—
Common shares, par value $1.00; 200,000,000 shares authorized, 72,441,647 shares issued	72.4		—
Capital surplus	1,722.6		—
Retained earnings	35.3		—
Crane Net Investment	—		915.3
Accumulated other comprehensive loss	(130.7)		(131.5)
Treasury stock	(844.4)		—
Total equity	855.2		783.8
Total liabilities and equity	$	2,195.0	$	2,129.4


Share data:
Common shares issued	72,441,647		n/a
Less: Common shares held in treasury	15,647,379		n/a
Common shares outstanding	56,794,268		n/a

See Notes to Unaudited Consolidated and Combined Condensed Financial Statements.

CRANE NXT, CO. AND SUBSIDIARIES

CONSOLIDATED AND COMBINED CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Six Months Ended
	June 30,
(in millions)	2023		2022
Operating activities:
Net income attributable to common shareholders	$	86.9	$	98.3



Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization	38.5		39.9
Stock-based compensation expense	4.7		4.5
Defined benefit plans and postretirement credit	(0.4)		(0.1)
Deferred income taxes	4.8		7.6
Cash used for operating working capital	(36.7)		(35.9)

Other	(2.8)		6.8
Total provided by operating activities	95.0		121.1
Investing activities:


Capital expenditures	(8.5)		(7.6)



Total used for investing activities	(8.5)		(7.6)
Financing activities:
Dividends paid	(7.9)		—

Stock options exercised, net of shares reacquired	1.9		—
Debt issuance costs	(5.2)		—

Repayment of long-term debt	(300.0)		—



Proceeds from term loan	350.0		—
Repayment of term loan	(50.0)		—
Net transfers to Crane	(32.5)		(72.9)
Total used for financing activities	(43.7)		(72.9)
Effect of exchange rates on cash and cash equivalents	3.4		(12.6)
Increase in cash and cash equivalents	46.2		28.0
Cash and cash equivalents at beginning of period	230.7		101.2
Cash and cash equivalents at end of period	$	276.9	$	129.2

See Notes to Unaudited Consolidated and Combined Condensed Financial Statements.

CRANE NXT, CO. AND SUBSIDIARIES

CONSOLIDATED AND COMBINED CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Six Months Ended
	June 30,
(in millions)	2023		2022
Detail of cash provided by (used for) operating working capital:
Accounts receivable	$	5.9	$	(1.5)
Inventories	(18.4)		(2.5)
Other current assets	(3.9)		(4.3)
Accounts payable	(8.8)		(4.9)
Accrued liabilities	(12.3)		(24.4)
U.S. and foreign taxes on income	0.8		1.7
Total	$	(36.7)	$	(35.9)

Supplemental disclosure of cash flow information:
Interest paid	$	19.8	$	20.6
Income taxes paid	$	28.9	$	19.0

See Notes to Unaudited Consolidated and Combined Condensed Financial Statements.

CRANE NXT, CO. AND SUBSIDIARIES

CONSOLIDATED AND COMBINED CONDENSED 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		Crane Net Investment		Total
BALANCE December 31, 2022	$	—	$	—	$	—	$	(131.5)	$	—	$	915.3	$	783.8
Net income	—		—		—		—		—		43.7

SEC Form 10-Q filed by Crane Company