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Scotsman
11-05-2025
- Politics
- Scotsman
Anger as Edinburgh councillor gets £6,000 raise to act as vice-convener of a planning committee
Watch more of our videos on and on Freeview 262 or Freely 565 Visit Shots! now The creation of a new £32,000 per year role as the vice-leader of an Edinburgh Council committee has been slammed as a 'an outrageous misuse of public funds'. Sign up to our daily newsletter Sign up Thank you for signing up! Did you know with a Digital Subscription to Edinburgh News, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... The new role of vice-convener of the Development Management Sub-Committee – a 'quasi-judicial' committee that handles planning matters – was approved at the city's full council meeting on Thursday. And the council leader told a full committee meeting that those disagreeing with the decision should 'look at the facts'. The office holder will be expected to substitute for the convener if they are not present. Advertisement Hide Ad Advertisement Hide Ad Conservative councillor Max Mitchell will take up the new role, with Liberal Democrat councillor Hal Osler continuing to convene the committee. And the new role will give Mr Mitchell a £6,000 pay boost – something which prompted criticism from other elected members in the chamber. Councillor Alys Mumford, the planning spokesperson for the Green group, said: 'The creation of a new, unnecessary position by the council administration is an outrageous misuse of public funds. 'It is absolutely right that there are paid positions leading the council's work to tackle some of the huge issues facing our residents, but to see this system treated with such disdain by the Labour Party to give jobs to their allies and shore up votes should shock the people of Edinburgh. 'Green councillors have some serious questions for the Labour Party about how they can justify spending public money in this way, and will be keeping a very close eye on this new position to see if there is any benefit at all for the people we have been elected to serve.' Advertisement Hide Ad Advertisement Hide Ad The new role will see Conservative councillor Max Mitchell get a £6,000 pay bump. | LDR There were also accusations that the new role was effectively a way for the Labour administration to 'buy' support from opposition councillors. Councillor Simita Kumar, the leader of the SNP group, said: 'We knew that Labour was buying support from the Tories for staying in power. 'But creating yet another fake job for a Conservative is a slap in the face. It's clear that Labour councillors will do any deal with the Tories, no matter how grubby, to cling onto administration. Edinburgh deserves better.' Advertisement Hide Ad Advertisement Hide Ad But council leader and Labour councillor Jane Meagher told councillors: 'I quickly want to knock on the head this myth that's constantly being perpetuated that there's some sort of a formal arrangement. There isn't. 'However, we know that the sheer arithmetic of this chamber means that three parties have to support an administration. And it's about who can maintain the confidence of sufficient numbers of the whole chamber. Ignore your flaunted opinions, look at the facts.' Several councillors told the Local Democracy Reporting Service that they believed that the Development Management Sub-Committee, and other quasi-judicial committees, do not need a vice convener – but that several of the larger 'policy' committees do need them. And independent councillor Ross McKenzie saying: 'Labour bosses dictated after the 2022 council elections that Labour should not be allowed to enter any coalitions. Advertisement Hide Ad Advertisement Hide Ad 'They were allowed to offer quasi-judicial roles to other parties, and the provost, but they weren't allowed to offer convenerships on any policy positions. 'So that's why they have to carve it up. The only way to be in power is to pay off some people to vote for you by giving them [Development Management Sub-Committee] jobs. And that's essentially what they do. It's nakedly self-serving.' Cllr Mitchell represents Inverleith ward, and was returned at the 2022 Edinburgh Council elections. Cllr McKenzie, who was a Labour councillor until he left the party in the middle of a budget meeting in 2023, suggested current Labour councillor Katrina Faccenda would have been a good fit for the role instead. Advertisement Hide Ad Advertisement Hide Ad He said: 'She has the potential to be a really good convener, and she's clearly one of the most competent councillors in the group. 'She's the one person they won't give [such a role] to. But they're happy to give another one to the Tories.'
Edinburgh Reporter
09-05-2025
- Politics
- Edinburgh Reporter
Anger at councillor's £6k raise to act as vice-convener of a planning committee
The creation of a new £32k per year role as the vice-leader of an Edinburgh Council committee has been slammed as a 'an outrageous misuse of public funds'. The new role of vice-convener of the Development Management Sub-Committee – a 'quasi-judicial' committee that handles planning matters – was approved at the city's full council meeting on Thursday. And the council leader told a full committee meeting that those disagreeing with the decision should 'look at the facts'. The office holder will be expected to substitute for the convener if they are not present. Conservative councillor Max Mitchell will take up the new role, with Liberal Democrat councillor Hal Osler continuing to convene the committee. And the new role will give Mr Mitchell a £6k pay boost – something which prompted criticism from other elected members in the chamber. Councillor Alys Mumford, the planning spokesperson for the Green group, said: 'The creation of a new, unnecessary position by the council administration is an outrageous misuse of public funds. 'It is absolutely right that there are paid positions leading the council's work to tackle some of the huge issues facing our residents, but to see this system treated with such disdain by the Labour Party to give jobs to their allies and shore up votes should shock the people of Edinburgh. 'Green councillors have some serious questions for the Labour Party about how they can justify spending public money in this way, and will be keeping a very close eye on this new position to see if there is any benefit at all for the people we have been elected to serve.' There were also accusations that the new role was effectively a way for the Labour administration to 'buy' support from opposition councillors. Councillor Simita Kumar, the leader of the SNP group, said: 'We knew that Labour was buying support from the Tories for staying in power. 'But creating yet another fake job for a Conservative is a slap in the face. It's clear that Labour councillors will do any deal with the Tories, no matter how grubby, to cling onto administration. Edinburgh deserves better.' But council leader and Labour councillor Jane Meagher told councillors yesterday: 'I quickly want to knock on the head this myth that's constantly being perpetuated that there's some sort of a formal arrangement. There isn't. 'However, we know that the sheer arithmetic of this chamber means that three parties have to support an administration. 'And it's about who can maintain the confidence of sufficient numbers of the whole chamber. Ignore your flaunted opinions, look at the facts.' In the report issued by officers before the meeting it states that 'the Council currently has 19 senior councillors (maximum 24) and spends £733,826 of the £955,455 allowance'. Several councillors told the Local Democracy Reporting Service that they believed that the Development Management Sub-Committee, and other quasi-judicial committees, do not need a vice convener – but that several of the larger 'policy' committees do need them. And independent councillor Ross McKenzie saying: 'Labour bosses dictated after the 2022 council elections that Labour should not be allowed to enter any coalitions. 'They were allowed to offer quasi-judicial roles to other parties, and the provost, but they weren't allowed to offer convenerships on any policy positions. 'So that's why they have to carve it up. The only way to be in power is to pay off some people to vote for you by giving them [Development Management Sub-Committee] jobs. And that's essentially what they do. It's nakedly self-serving.' Cllr Mitchell represents Inverleith ward, and was returned at the 2022 Edinburgh Council elections. Cllr McKenzie, who was a Labour councillor until he left the party in the middle of a budget meeting in 2023, suggested current Labour councillor Katrina Faccenda would have been a good fit for the role instead. He said: 'She has the potential to be a really good convener, and she's clearly one of the most competent councillors in the group. 'She's the one person they won't give [such a role] to. But they're happy to give another one to the Tories.' By Joseph Sullivan Local Democracy Reporter Like this: Like Related
Edinburgh Live
09-05-2025
- Politics
- Edinburgh Live
New £32k per year role for Edinburgh councillor an 'outrageous misuse of public funds'
Our community members are treated to special offers, promotions and adverts from us and our partners. You can check out at any time. More info The creation of a new £32k per year role as the vice-leader of an Edinburgh Council committee has been slammed as "an outrageous misuse of public funds". The new role of vice-convener of the Development Management Sub-Committee - a 'quasi-judicial' committee that handles planning matters - was approved at the city's full council meeting on Thursday. And the council leader told a full committee meeting that those disagreeing with the decision should "look at the facts". The office holder will be expected to substitute for the convener if they are not present. Conservative councillor Max Mitchell will take up the new role, with Liberal Democrat councillor Hal Osler continuing to convene the committee. And the new role will give Mr Mitchell a £6k pay boost - something which prompted criticism from other elected members in the chamber. Councillor Alys Mumford, the planning spokesperson for the Green group, said: 'The creation of a new, unnecessary position by the council administration is an outrageous misuse of public funds. 'It is absolutely right that there are paid positions leading the council's work to tackle some of the huge issues facing our residents, but to see this system treated with such disdain by the Labour Party to give jobs to their allies and shore up votes should shock the people of Edinburgh. 'Green councillors have some serious questions for the Labour Party about how they can justify spending public money in this way, and will be keeping a very close eye on this new position to see if there is any benefit at all for the people we have been elected to serve.' There were also accusations that the new role was effectively a way for the Labour administration to "buy" support from opposition councillors. Councillor Simita Kumar, the leader of the SNP group, said: 'We knew that Labour was buying support from the Tories for staying in power. 'But creating yet another fake job for a Conservative is a slap in the face. It's clear that Labour councillors will do any deal with the Tories, no matter how grubby, to cling onto administration. Edinburgh deserves better.' But council leader and Labour councillor Jane Meagher told councillors yesterday: "I quickly want to knock on the head this myth that's constantly being perpetuated that there's some sort of a formal arrangement. There isn't. "However, we know that the sheer arithmetic of this chamber means that three parties have to support an administration. "And it's about who can maintain the confidence of sufficient numbers of the whole chamber. Ignore your flaunted opinions, look at the facts." Several councillors told the Local Democracy Reporting Service that they believed that the Development Management Sub-Committee, and other quasi-judicial committees, do not need a vice convener – but that several of the larger 'policy' committees do need them. And independent councillor Ross McKenzie saying: 'Labour bosses dictated after the 2022 council elections that Labour should not be allowed to enter any coalitions. 'They were allowed to offer quasi-judicial roles to other parties, and the provost, but they weren't allowed to offer convenerships on any policy positions. 'So that's why they have to carve it up. The only way to be in power is to pay off some people to vote for you by giving them [Development Management Sub-Committee] jobs. And that's essentially what they do. It's nakedly self-serving.' Cllr Mitchell represents Inverleith ward, and was returned at the 2022 Edinburgh Council elections. Cllr McKenzie, who was a Labour councillor until he left the party in the middle of a budget meeting in 2023, suggested current Labour councillor Katrina Faccenda would have been a good fit for the role instead. He said: 'She has the potential to be a really good convener, and she's clearly one of the most competent councillors in the group. 'She's the one person they won't give [such a role] to. But they're happy to give another one to the Tories.'
Business Wire
28-04-2025
- Business
- Business Wire
Crane Company Reports First Quarter 2025 Results and Reaffirms Full Year EPS Guidance
STAMFORD, Conn.--(BUSINESS WIRE)--Crane Company ("Crane," NYSE: CR) today announced its financial results for the first quarter of 2025 and reaffirmed its full-year adjusted EPS outlook. Max Mitchell, Crane's Chairman, President and Chief Executive Officer, stated: "We delivered a very strong start to 2025, with exceptional results in the first quarter of 24.1% adjusted EPS growth driven by 7.5% core sales growth and strong operating leverage. Furthermore, demand trends across our strategic growth platforms were solid in the quarter, with 15.6% year-over-year core order growth and 12.1% year-over-year core backlog growth. "Our teams continue to execute extremely well. Our key initiatives remain aligned with driving above-market returns by focusing on commercial and operational excellence, as well as delivering breakthrough innovation for our customers. Over the last few months, just a few notable successes at Aerospace & Electronics include winning additional incremental content on hybrid-electric military ground vehicles and completing initial development work for an anti-skid brake control system for a very promising unmanned fighter aircraft; and at Process Flow Technologies, we received critical approvals for a new pharmaceutical valve with a key customer, and we completed the first installations of our new SyFlo wastewater pump product. "As we exited 2024, we had a very positive outlook for 2025 given the expectation of executing successfully on our strategy and growth initiatives, along with a favorable macroeconomic outlook. As the quarter progressed, we gained confidence in a path to earnings above the guidance range we provided in January. However, given recent economic developments and policy decisions outside of our control, the balance of the year is likely to unfold differently than we had anticipated. Despite this uncertainty, based on the current inflationary pressures, and the demand and supply chain environment that we see today, along with our best analysis of the risks and opportunities ahead of us this year, we are comfortable reaffirming our full-year 2025 adjusted EPS outlook in the range of $5.30-$5.60. Our outlook reflects our views based on current economic conditions, and we will, of course, adjust that outlook if needed based on any updates or changes to trade policy or any incremental changes in the demand environment. "While factors outside our control remain dynamic, Crane remains extremely well positioned to outgrow our end markets and deliver above-market shareholder returns. Our focus today is executing on everything within our control, reacting swiftly to what is outside our control, serving our customers, and continuing to invest in all of our growth initiatives and technology roadmaps. I fully expect to emerge from this dislocation in an even stronger competitive position than when we entered the year and our teams are excited to capitalize on the opportunities, and to face the challenges, that lie ahead." First Quarter 2025 Results First quarter 2025 GAAP EPS from continuing operations of $1.34 compared to $1.02 in the first quarter of 2024. First quarter 2025 adjusted EPS from continuing operations of $1.39 compared to $1.12 in the first quarter of 2024. First quarter sales increased 9.3%, with 7.5% core sales growth, a 2.5% contribution from acquisitions, and a slight headwind from unfavorable foreign exchange. Operating profit of $101.1 million increased 24.4% compared to last year, and adjusted operating profit of $104.1 million increased 17.6% compared to last year, in both cases primarily reflecting the impact of productivity and higher volumes. Summary of First Quarter 2025 Results Cash Flow, Financing Activities and Other Financial Metrics During the first quarter of 2025, cash used for operating activities from continuing operations was $46.2 million, capital expenditures were $14.2 million, and free cash flow (cash provided by operating activities less capital spending) was negative $60.4 million consistent with typical seasonality. Adjusted free cash flow from continuing operations (free cash flow excluding transaction related cash outflows) was negative $58.2 million. (Please see the attached non-GAAP Financial Measures tables.) As of March 31, 2025, the Company's cash balance was $435.1 million with total debt of $247.1 million. Rich Maue, Crane's Executive Vice President and Chief Financial Officer, added: "M&A activity levels remain robust despite heightened economic and trade related uncertainty, and we are in various stages of active engagement on more transactions than we have been in years. Opportunities are spread across both Aerospace & Electronics and Process Flow Technologies, and include assets in a wide range of sizes. We look forward to putting our balance sheet to work over the course of this year, with disciplined inorganic growth an important component of our strategy to continue driving above-market returns for our shareholders." First Quarter 2025 Segment Results All comparisons detailed in this section refer to operating results for the first quarter 2025 versus the first quarter 2024. Aerospace & Electronics Sales of $248.9 million increased 10.2% compared to the prior year, driven by 10.3% core sales growth and partially offset by a slight headwind from unfavorable foreign exchange. The strength was driven primarily by the segment's aftermarket, up 20.4% in the quarter. Operating profit margin of 26.0% increased 460 basis points from last year, primarily reflecting the impact of productivity, higher volumes, and higher price net of inflation. Adjusted operating profit margin of 26.0% increased 360 basis points from last year. Aerospace & Electronics' order backlog was $960.1 million as of March 31, 2025 compared to $863.8 million as of December 31, 2024, and $791.8 million as of March 31, 2024. Process Flow Technologies Sales of $308.7 million increased 8.6% compared to the prior year, driven by 5.3% core sales growth and a 4.5% contribution from the previously announced CryoWorks and Technifab acquisitions, partially offset by a 1.2% headwind from unfavorable foreign exchange. Operating profit margin expanded 30 basis points to 20.3% primarily due to productivity. Adjusted operating profit margin was 20.9% flat compared to a year ago. Importantly, core operating leverage was 35% in the quarter, at the high end of its expected range. Process Flow Technologies order backlog was $389.9 million as of March 31, 2025 compared to $376.4 million as of December 31, 2024, and $393.3 million as of March 31, 2024. Reaffirming 2025 Guidance We are reaffirming our full-year adjusted EPS outlook range of $5.30 to $5.60, up 12% at the mid-point over 2024. Key assumptions for our guidance are unchanged and include: Total sales growth of approximately 5%, driven by core sales growth of approximately 4% to 6%. Adjusted segment operating margin of 22.5%+. Corporate cost of $80 million. Net non-operating expense of $10 million. Adjusted tax rate of 23.5%. Diluted shares of ~59 million. Additional details of our outlook and guidance are included in the presentation that accompanies this earnings release available on our website at in the "investors" section. Declaring Second Quarter Dividend Crane announced its regular quarterly dividend of $0.23 per share for the second quarter of 2025. The dividend is payable on June 11, 2025 to shareholders of record as of May 30, 2025. Additional Information References to changes in 'core sales' or "core sales growth" in this report include the change in sales excluding the impact of foreign currency translation and acquisitions and divestitures from closing up to the first anniversary of such acquisitions or divestitures. "Core Operating Leverage" is calculated as the change in core sales compared to the prior year, excluding acquisition contribution, divided by the change in core operating profit compared to the prior year, excluding the profit contribution from acquisitions. Conference Call Crane has scheduled a conference call to discuss the first quarter financial results on Tuesday, April 29, 2025 at 10:00 A.M. (Eastern). All interested parties may listen to a live webcast of the call at An archived webcast will also be available to replay this conference call directly from the Company's website under Investors, Events & Presentations. Slides that accompany the conference call will be available on the Company's website. About Crane Company Crane Company has delivered innovation and technology-led solutions for customers since its founding in 1855. Today, Crane is a leading manufacturer of highly engineered components for challenging, mission-critical applications focused on the aerospace, defense, space and process industry end markets. The Company has two strategic growth platforms: Aerospace & Electronics and Process Flow Technologies. Crane has approximately 7,500 employees in the Americas, Europe, the Middle East, Asia and Australia. Crane Company is traded on the New York Stock Exchange (NYSE: CR). For more information, visit Forward-Looking Statements Disclaimer This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements include all statements that are not historical statements of fact and those regarding our intent, belief, or expectations, including, but not limited to: benefits and synergies of the separation transaction; strategic and competitive advantages of Crane; future financing plans and opportunities; and business strategies, prospects and projected operating and financial results. We caution investors not to place undue reliance on any such forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could lead to actual results differing materially from those projected, forecasted or expected. Although we believe that the assumptions underlying the forward-looking statements are reasonable, we can give no assurance that our expectations will be attained. Risks and uncertainties that could cause actual results to differ materially from our expectations include, but are not limited to: changes in global economic conditions (including inflationary pressures and new tariffs) and geopolitical risks, including macroeconomic fluctuations that may harm our business, results of operation and stock price; information systems and technology networks failures and breaches in data security, theft of personally identifiable and other information, non-compliance with our contractual or other legal obligations regarding such information; our ability to source components and raw materials from suppliers, including disruptions and delays in our supply chain; demand for our products, which is variable and subject to factors beyond our control; governmental regulations and failure to comply with those regulations; fluctuations in the prices of our components and raw materials; loss of personnel or being able to hire and retain additional personnel needed to sustain and grow our business as planned; risks from environmental liabilities, costs, litigation and violations that could adversely affect our financial condition, results of operations, cash flows and reputation; risks associated with conducting a substantial portion of our business outside the U.S.; being unable to identify or complete acquisitions, or to successfully integrate the businesses we acquire, or complete dispositions; adverse impacts from intangible asset impairment charges; potential product liability or warranty claims; being unable to successfully develop and introduce new products, which would limit our ability to grow and maintain our competitive position and adversely affect our financial condition, results of operations and cash flow; significant competition in our markets; additional tax expenses or exposures that could affect our financial condition, results of operations and cash flows; inadequate or ineffective internal controls; specific risks relating to our reportable segments, including Aerospace & Electronics, and Process Flow Technologies; the ability and willingness of Crane Company and Crane NXT, Co. to meet and/or perform their obligations under any contractual arrangements that are entered into among the parties in connection with the separation transaction and any of their obligations to indemnify, defend and hold the other party harmless from and against various claims, litigation and liabilities; and the ability to achieve some or all the benefits that we expect to achieve from the separation transaction. Readers should carefully review Crane's financial statements and the notes thereto, as well as the section entitled 'Risk Factors' in Item 1A of Crane's Annual Report on Form 10-K for the year ended December 31, 2024 and the other documents Crane files from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Crane assumes no (and disclaims any) obligation to revise or update any forward-looking statements. We make no representations or warranties as to the accuracy of any projections, statements or information contained in this press release. It is understood and agreed that any such projections, targets, statements and information are not to be viewed as facts and are subject to significant business, financial, economic, operating, competitive and other risks, uncertainties and contingencies many of which are beyond our control, that no assurance can be given that any particular financial projections ranges, or targets will be realized, that actual results may differ from projected results and that such differences may be material. While all financial projections, estimates and targets are necessarily speculative, we believe that the preparation of prospective financial information involves increasingly higher levels of uncertainty the further out the projection, estimate or target extends from the date of preparation. The assumptions and estimates underlying the projected, expected or target results are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the financial projections, estimates and targets. The inclusion of financial projections, estimates and targets in this press release should not be regarded as an indication that we or our representatives, considered or consider the financial projections, estimates and targets to be a reliable prediction of future events. (Financial Tables Follow) CRANE COMPANY Condensed Balance Sheets (unaudited, in millions) March 31, 2025 December 31, 2024 Assets Current assets Cash and cash equivalents $ 435.1 $ 306.7 Accounts receivable, net 384.4 339.1 Inventories, net 391.6 380.4 Other current assets 162.4 159.1 Current assets held for sale — 217.9 Total current assets 1,373.5 1,403.2 Property, plant and equipment, net 270.1 261.3 Other assets 309.1 315.8 Goodwill 669.4 661.6 Total assets $ 2,622.1 $ 2,641.9 Liabilities and Equity Current liabilities Current maturities of long-term debt $ 247.1 $ — Accounts payable 149.6 188.2 Accrued liabilities 244.4 303.2 Income taxes 18.4 7.9 Current liabilities held for sale — 44.1 Total current liabilities 659.5 543.4 Long-term debt — 247.0 Long-term deferred tax liability 35.9 34.8 Other liabilities 167.5 175.7 Total liabilities 862.9 1,000.9 Total equity 1,759.2 1,641.0 Total liabilities and equity $ 2,622.1 $ 2,641.9 Expand CRANE COMPANY Condensed Statements of Cash Flows (unaudited, in millions) Three Months Ended March 31, 2025 2024 Operating activities: Net income attributable to common shareholders $ 107.1 $ 64.8 Less: Income from discontinued operations, net of tax 28.8 6.0 Net income from continuing operations attributable to common shareholders 78.3 58.8 Depreciation and amortization 12.5 11.9 Stock-based compensation expense 9.3 6.5 Defined benefit plans and postretirement cost 2.0 0.8 Deferred income taxes — (3.1 ) Cash used for operating working capital (146.4 ) (143.0 ) Defined benefit plans and postretirement contributions (0.6 ) (0.6 ) Environmental payments, net of reimbursements (1.1 ) (1.4 ) Other (0.2 ) (0.8 ) Total used for operating activities from continuing operations (46.2 ) (70.9 ) Investing activities: Payment for acquisitions - net of cash acquired and working capital adjustments (0.2 ) (105.6 ) Capital expenditures (14.2 ) (8.0 ) Other investing activities — 0.2 Total used for investing activities from continuing operations (14.4 ) (113.4 ) Financing activities: Dividends paid (13.2 ) (11.7 ) Net payments related to employee stock plans (10.4 ) (8.5 ) Proceeds from debt — 140.0 Repayments of debt — (31.9 ) Total (used for) provided by financing activities from continuing and discontinued operations (23.6 ) 87.9 Discontinued operations: Total used for operating activities — (9.0 ) Total provided by (used for) investing activities (a) 207.7 (1.1 ) Increase (decrease) in cash and cash equivalents from discontinued operations 207.7 (10.1 ) Effect of exchange rate on cash and cash equivalents 4.9 (3.7 ) Increase (decrease) in cash and cash equivalents 128.4 (110.2 ) Cash and cash equivalents at beginning of period 306.7 329.6 Cash and cash equivalents of continuing operations at end of period $ 435.1 $ 219.4 (a) For the three months ended March 31, 2025, the cash provided by investing activities from discontinued operations was from the sale of the Engineered Materials segment. Expand CRANE COMPANY Order Backlog (unaudited, in millions) March 31, December 31, September 30, June 30, March 31, 2025 2024 2024 2024 2024 Aerospace & Electronics $ 960.1 $ 863.8 $ 833.3 $ 814.9 $ 791.8 Process Flow Technologies (a)(b) 389.9 376.4 392.0 399.9 393.3 Total backlog $ 1,350.0 $ 1,240.2 $ 1,225.3 $ 1,214.8 $ 1,185.1 (a) Includes $12.5 million, $11.2 million, $12.8 million and $11.6 million of backlog as of March 31, 2025, December 31, 2024, September 30,2024 and June 30, 2024, respectively, pertaining to the CryoWorks acquisition. (b) Includes $9.3 million and $10.4 million of backlog as of March 31,2025 and December 31, 2024, respectively pertaining to the Technifab acquisition. Expand CRANE COMPANY Non-GAAP Financial Measures (unaudited, in millions, except per share data) Three Months Ended March 31, 2025 2024 % Change $ Per Share $ Per Share (on $) Net sales (GAAP) $ 557.6 $ 510.2 9.3 % Adjusted Operating Profit and Adjusted Operating Profit Margin Operating profit (GAAP) $ 101.1 $ 81.3 24.4 % Operating profit margin (GAAP) 18.1 % 15.9 % Special items impacting operating profit: Transaction related expenses 2.9 6.8 Repositioning related charges, net 0.1 0.4 Adjusted operating profit (Non-GAAP) $ 104.1 $ 88.5 17.6 % Adjusted operating profit margin (Non-GAAP) 18.7 % 17.3 % Adjusted Net Income and Adjusted Net Income per Share Net income from continuing operations attributable to common shareholders (GAAP) $ 78.3 $ 1.34 $ 58.8 $ 1.02 33.2 % Transaction related expenses 3.0 0.05 6.8 0.11 Repositioning related charges, net 0.1 — 0.4 0.01 Impact of pension non-service costs 1.2 0.02 0.4 0.01 Tax effect of the Non-GAAP adjustments (0.9 ) (0.02 ) (1.5 ) (0.03 ) Adjusted net income (Non-GAAP) $ 81.7 $ 1.39 $ 64.9 $ 1.12 25.9 % Adjusted EBITDA and Adjusted EBITDA Margin Net income from continuing operations attributable to common shareholders (GAAP) $ 78.3 $ 58.8 33.2 % Net income margin (GAAP) 14.0 % 11.5 % Adjustments to net income: Interest expense, net 1.3 6.0 Income tax expense 20.5 15.3 Depreciation 8.8 8.0 Amortization 3.7 3.9 Miscellaneous expense, net 1.0 1.2 Repositioning related charges, net 0.1 0.4 Transaction related expenses 2.2 6.8 Adjusted EBITDA (Non-GAAP) $ 115.9 $ 100.4 15.4 % Adjusted EBITDA Margin (Non-GAAP) 20.8 % 19.7 % Totals may not sum due to rounding Expand CRANE COMPANY Non-GAAP Financial Measures by Segment (unaudited, in millions) Three Months Ended March 31, 2025 Aerospace & Electronics Process Flow Technologies Corporate Total Company Net sales $ 248.9 $ 308.7 $ — $ 557.6 Operating profit (GAAP) $ 64.6 $ 62.8 $ (26.3 ) $ 101.1 Operating profit margin (GAAP) 26.0 % 20.3 % 18.1 % Special items impacting operating profit: Transaction related expenses — 1.5 1.4 2.9 Repositioning related charges, net — 0.1 — 0.1 Adjusted operating profit (Non-GAAP) $ 64.6 $ 64.4 $ (24.9 ) $ 104.1 Adjusted operating profit margin (Non-GAAP) 26.0 % 20.9 % 18.7 % Three Months Ended March 31, 2024 Net sales $ 225.9 $ 284.3 $ — $ 510.2 Operating profit (GAAP) $ 48.3 $ 56.9 $ (23.9 ) $ 81.3 Operating profit margin (GAAP) 21.4 % 20.0 % 15.9 % Special items impacting operating profit: Transaction related expenses 2.4 1.9 2.5 6.8 Repositioning related charges, net — 0.4 — 0.4 Adjusted operating profit (Non-GAAP) $ 50.7 $ 59.2 $ (21.4 ) $ 88.5 Adjusted operating profit margin (Non-GAAP) 22.4 % 20.8 % 17.3 % Totals may not sum due to rounding Expand CRANE COMPANY Adjusted Free Cash Flow (unaudited, in millions, except per share data) Three Months Ended March 31, Cash Flow Items 2025 2024 Cash used for operating activities from continuing operations $ (46.2 ) $ (70.9 ) Less: Capital expenditures (14.2 ) (8.0 ) Free cash flow $ (60.4 ) $ (78.9 ) Adjustments: Transaction-related expenses 2.2 2.7 Adjusted free cash flow from continuing operations $ (58.2 ) $ (76.2 ) Free cash flow from Engineered Materials — (10.1 ) Adjusted free cash flow $ (58.2 ) $ (86.3 ) Expand Crane Company reports its financial results in accordance with U.S. generally accepted accounting principles ('GAAP'). This press release includes certain non-GAAP financial measures, including adjusted operating profit, adjusted operating profit margin, adjusted tax rate, adjusted net income, adjusted EPS, adjusted EBITDA, Free Cash Flow and Adjusted Free Cash Flow, that are not prepared in accordance with GAAP. These non-GAAP measures are an addition, and not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP and should not be considered as an alternative to operating income, net income or any other performance measures derived in accordance with GAAP. We believe that these non-GAAP measures of financial results (including on a forward-looking or projected basis) provide useful supplemental information to investors about Crane Company. Our management uses certain forward looking non-GAAP measures to evaluate projected financial and operating results. However, there are a number of limitations related to the use of these non-GAAP measures and their nearest GAAP equivalents. For example, other companies may calculate non-GAAP measures differently or may use other measures to calculate their financial performance, and therefore our non-GAAP measures may not be directly comparable to similarly titled measures of other companies. Reconciliations of certain forward-looking and projected non-GAAP measures for Crane Company, including Adjusted EPS, and Adjusted segment margin to the closest corresponding GAAP measure are not available without unreasonable efforts due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures, which could have a potentially significant impact on our future GAAP results. For Crane Company, these forward looking and projected non-GAAP measures are calculated as follows: "Adjusted segment operating margin" is calculated as adjusted segment operating profit divided by segment sales. Adjusted segment operating profit is calculated as operating profit excluding corporate costs and before Special Items which include transaction related expenses and repositioning related charges. We believe that non-GAAP financial measures that exclude these items provide investors with an alternative metric that can assist in predicting future earnings and profitability that are complementary to GAAP metrics. "Adjusted Tax Rate" is calculated as tax excluding the impact from items which are outside of our core performance, some of which may or may not be non-recurring, and which we believe may complicate the presentation of the Company's underlying earnings divided by "Adjusted Net Income". "Adjusted EPS" is calculated as adjusted net income divided by diluted shares. Adjusted net income is calculated as net income adjusted for Special Items which include transaction related expenses such as professional fees, and incremental costs related to acquisitions; repositioning related charges; and, the impact of pension non-service costs. We believe that non-GAAP financial measures adjusted for these items provide investors with an alternative metric that can assist in predicting future earnings and profitability that are complementary to GAAP metrics. We believe that each of the following non-GAAP measures provides useful information to investors regarding the Company's financial conditions and operations: "Adjusted Operating Profit" and "Adjusted Operating Margin" add back to Operating Profit items which are outside of our core performance, some of which may or may not be non-recurring, and which we believe may complicate the interpretation of the Company's underlying earnings and operational performance. These items include income and expense such as: transaction related expenses and repositioning related (gains) charges. These items are not incurred in all periods, the size of these items is difficult to predict, and none of these items are indicative of the operations of the underlying businesses. We believe that non-GAAP financial measures that exclude these items provide investors with an alternative metric that can assist in predicting future earnings and profitability that are complementary to GAAP metrics. "Adjusted Net Income" and "Adjusted EPS" exclude items which are outside of our core performance, some of which may or may not be non-recurring, and which we believe may complicate the presentation of the Company's underlying earnings and operational performance. These measures include income and expense items that impacted Operating Profit such as: transaction related expenses and repositioning related (gains) charges. Additionally, these non-GAAP financial measures exclude income and expense items that impacted Net Income and Earnings per Diluted Share such as the impact of pension non-service costs. These items are not incurred in all periods, the size of these items is difficult to predict, and none of these items are indicative of the operations of the underlying businesses. We believe that non-GAAP financial measures that exclude these items provide investors with an alternative metric that can assist in predicting future earnings and profitability that are complementary to GAAP metrics. "Adjusted EBITDA" adds back to net income: net interest expense, income tax expense, depreciation and amortization, miscellaneous (income) expense, net, and Special Items including transaction related expenses. "Adjusted EBITDA Margin" is calculated as adjusted EBITDA divided by net sales. We believe that adjusted EBITDA and adjusted EBITDA margin provide investors with an alternative metric that may be a meaningful indicator of our performance and provides useful information to investors regarding our financial conditions and results of operations that is complementary to GAAP metrics. 'Free Cash Flow' and 'Adjusted Free Cash Flow from continuing operations' provide supplemental information to assist management and investors in analyzing the Company's ability to generate liquidity from its operating activities. The measure of free cash flow does not take into consideration certain other non-discretionary cash requirements such as, for example, mandatory principal payments on the Company's long-term debt. Free Cash Flow is calculated as cash provided by operating activities less capital spending. Adjusted Free Cash Flow from continuing operations is calculated as Free Cash Flow adjusted for certain cash items which we believe may complicate the interpretation of the Company's underlying free cash flow performance such as certain transaction related cash flow items related to acquisitions. These items are not incurred in all periods, the size of these items is difficult to predict, and none of these items are indicative of the operations of the underlying businesses. We believe that non-GAAP financial measures that exclude these items provide investors with an alternative metric that can assist in predicting future cash flows that are complementary to GAAP metrics.
Yahoo
29-01-2025
- Business
- Yahoo
Q4 2024 Crane Co Earnings Call
Allison Poliniak-Cusic; Vice President, Investor Relations; Crane Co Max Mitchell; President, Chief Executive Officer, Director; Crane Co Alejandro Alcala; Executive Vice President; Crane Co Richard Maue; Chief Financial Officer, Executive Vice President; Crane Co Nathan Jones; Analyst; Stifel Nicolaus & Company Matt Summerville; Analyst; DA Davidson & Co Jordan Lyonnais; Analyst; BofA Securities Justin Ages; Analyst; CJS Securities Tony Bancroft; Analyst; Gabelli Funds Operator Welcome to the Crane Company fourth-quarter and full-year 2024 earnings conference call. (Operator Instructions)I would now like to turn the call over to Allison Poliniak, Vice President of Investor Relations. Allison Poliniak-Cusic Thank you, Shelby, and good day, everyone. Welcome to our fourth-quarter 2024 earnings release conference call. On our call this morning, we have Max Mitchell, our Chairman, President, and Chief Executive Officer; Alex Alcala, Executive Vice President and Chief Operating Officer; and Rich Maue, our Executive Vice President and Chief Financial Officer; along with Jason Feldman, Senior Vice President, Treasury, Tax, and Investor Relations, who is also on for Q& will start off our call with a few prepared remarks from Max, Alex, and Rich, after which we will respond to questions. And just a reminder, the comments we make on this call will 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 during the call, we will be using some non-GAAP numbers which are reconciled to the comparable GAAP numbers and tables at the end of our press release and accompanying slide presentation, both of which are available on our website at in the Investor Relations let me turn the call over to Max. Max Mitchell Thank you, Allison. Thanks, everyone, for joining the call a strong close in Q4 to another excellent year with results nicely outperforming our expectations. But before we dive into the results, I would like to touch on a few recent announcements. First, I want to acknowledge Alex Alcala who was promoted to Chief Operating Officer back in December and who is joining us for the call this morning and moving of you already know him from the 12 years he has been part of the team, but for those that do not, Alex has been an instrumental partner to me as we have strategically transformed Crane's portfolio into a higher growth, higher margin, and higher return business. Alex has demonstrated his strategic and operational capabilities in a number of roles at Crane, first, as President of our pumps and systems business, then as President of our process valve business, followed by roles as senior Vice President for the process flow technology segment, and as executive Vice President, managing all of our post separation segments and regional appointment as COO gives me further capacity to focus my attention on accelerating Crane's growth through strategy deployment and strategic acquisitions. Congratulations, Alex, and thank you for all you do in being Crane and driving results with the team. Alejandro Alcala Thank you, Max. Thanks for the kind comments. It has been really fun, and I'm so proud of our team. I look forward to continued investor communications. Max Mitchell Also, a reminder that on January 2, we announced the completion of the divestiture of our engineered materials segment. This divestiture reflects yet another important step forward following the numerous actions we have taken over the last few years to simplify and strengthen our portfolio, focusing resources on our two strategic growth platforms, aerospace and electronics and process flow technologies. With this divestiture now behind us, we are focused on driving accelerated inorganic growth through capital deployment with our very strong balance sheet as well as accelerating organic profitable growth through our disciplined cadence and execution. Following that divestiture, the results we speak to today treat engineered materials as discontinued operations for all of on to the quarter. Adjusted EPS of $1.26 was driven by an impressive 8% core sales growth, reflecting strength across both aerospace and electronics and process flow technologies. Core orders were also solid, up 8% in the quarter. We continue to drive outstanding results despite some unique and temporary challenges in the quarter we previously discussed, which include the impact of hurricane Helene on our Marion, North Carolina facility. I'm extremely pleased to report that the site is recovering ahead of schedule, and it's getting close to normal full production I highlighted last quarter, a key tenet and strength of the Crane business system that we have proven time after time over the years is the flexibility and speed to react to issues outside our control. Our performance in 2024 is another great example of our consistently differentiated performance in the face of adjusted EPS was $4.88, up 28% over 2023. Sales for 2024 increased 14% driven by 8% core growth and 6% contribution from acquisitions. Adjusted operating profit of $383 million for the full year increased 29% compared to the prior year. Coming off record performance in 2024 and turning to 2025, I remain highly confident in the strength and resilience of Crane's team and portfolio, and that confidence is also reflected in the dividend increase announced last night of 12%. In addition, I feel confident in our initial 2025 adjusted EPS guidance of $5.30 to $5.60, solid 12% adjusted EPS growth at the setting our initial view for the year, we assume that the macro backdrop remains largely unchanged with strong demand trends at aerospace and electronics and continued market outperformance of process flow technologies even as industrial demand signals remain mixed. Further, our balance sheet is well positioned to capitalize on M&A opportunities. And with continued progress on our existing M&A funnel, we expect additional opportunities to become actionable in 2025 across both aerospace and electronics and process flow technologies. Our funnel is strong. There's a lot of activity.I personally visited two potential targets with the team this month alone, one in the Midwest, one in Europe. And indications are that quite a few assets we've targeted for years will become actionable over the course of turning the call over to Alex, just a quick reminder that we will be hosting an investor meeting at our aerospace and electronics site in Fort Walton Beach, Florida on March 6, 2025. This location is the production site for our defense power business which houses manufacturing of our wide range of power conversion products used in applications such as next-gen military radars, as an example, with growing capability and ultra high power for emerging ground vehicles and other solutions. I look forward to seeing many of you there. Please reach out to Allison if you need further let me pass it over to our Chief Operating Officer, Mr. Alex Alcala, to highlight some of the key wins and successes in the quarter. Alejandro Alcala Thanks, Max, and thanks again for the kind introduction. It has been an honor to be on this journey with you and the team, as we've continued to transform Crane and unlock value. Our teams are energized about our future, and in many ways, I feel we're just getting started. I look forward to seeing many of you in Fort Walton Beach in March, where we will go into a little bit more detail about this robust machine we have built at Crane to continue to drive sustainable profitable me move on now to make some comments on the quarter. Within aerospace and electronics, demand remains strong across all categories of our defense and commercial business. I'm proud to report we received the first F-16 brake control upgrade order, further solidifying our confidence in a steep ramp-up for this program, starting at the very beginning of 2026. Total orders received for this project are now about $44 million including some foreign military sales. As a reminder, this is a three-year brake modernization program for the US Air Force fleet of F-16 fighter aircraft at about $30 million per year run rate, with total life of program of sales $150 million to 200 million including foreign military sales, most of which will follow the US portion of the also made continued progress on vehicle electrification demonstrator programs, and we are continuing strong proposal activity on additional AESA radars. Also other significant negotiations continue for additional unmanned collaborative combat aircraft Process Flow Technologies, we continue to outperform with our results better than we expected in 2024. For 2025, we see little change today in the demand environment, with North America remaining the greatest growth region for the fourth quarter, Crane secured a sizable order for a large fertilizer project in the Middle East. Our valves provide superior abrasive resistance, and we have a preferred manufacturing location aligned with Saudi Vision 2030 that prioritizes localization, and this was a key enabler for this win. And in North America, we received sizable orders related to the expansion of a facility for a large chemical the acquisitions of CryoWorks and Technifab, Crane has penetrated the high-growth market of space launch and semiconductor cryogenic equipment market, adding approximately $55 million of revenue and consolidating our position as a top provider of cryogenics vacuum jacketed pipe in the US, which we expect to expand further in another strong quarter for both Aerospace & Electronics and Process Flow Technologies, both in reported results as well as on our activity supporting current and future long term, as we reiterated during our 2024 Investor Day, we remain confident in a 4% to 6% long-term core sales growth rate from resilient and durable businesses with solid aftermarket and substantial operating leverage on top of already solid margins today that should lead to double-digit average annual core profit growth with potential upside from capital deployment. And with virtually no debt, the capital deployment opportunity is let me turn the call over to our CFO, Mr. Rich Maue for more specifics on the quarter and some more details on our guidance. Richard Maue Thank you, Alex. And my congratulations as well, and welcome to our quarterly calls. Hey, like John C. Reilly playing the part of Dale in timeless movie classic, Step Brothers, said to his step brother, Brennan, "Maybe someday we could become friends, friends who ride majestic, translucent steeds, shooting flaming arrows across the Bridge of Hemdale." Alex, as you well know, in addition to driving results and hunting for acquisitions, we like have fun here Crane, so you may want to think about what you will bring to the calls here moving forward. Alejandro Alcala Okay, Rich. That's a very low bar to get over. So let me think about it. Max Mitchell Let's get back to the call. Richard Maue Okay. Good morning, everyone. Starting with total company results. We drove 8% core sales growth in the quarter with strength across both segments. Adjusted operating profit increased 38%, driven by strong volumes, solid net price and productivity, excellent operating leverage in the quarter. Leading indicators were also strong with core FX-neutral backlog up 9% compared to last year, driven by outsized strength at Aerospace & Electronics, and core orders were up 8% compared to last year as well. Another strong quarter reflecting our focus on accelerating core growth along with our consistently differentiated the full year, we generated $234 million of adjusted free cash flow from continuing operations and well above the $165 million generated a year ago. Recall, our October free cash flow guidance was for full year free cash flow to be at the lower end of our $255 million to $275 million range. That range included approximately $20 million that we expected from Engineered Materials. Excluding Engineered Materials, that range would have been $235 million to $255 million. So results were in line with our expectations. And in 2025, we are confident that we will deliver adjusted free cash flow conversion greater than 90% as the supply chain debt at the end of 2024 was approximately $247 million, with $307 million of cash on hand, net proceeds of $208 million from the divestiture of the Engineered Materials segment were received after the close of the year. We continue to have substantial financial flexibility with approximately $1.5 billion of debt capacity today for M& a reminder, we will deploy our capital with the same strict financial and strategic discipline that we always have employed, prioritizing internal investments for growth, followed by M&A and returns to shareholders. And as Max noted, our M&A pipeline remains very active, and we are excited about our acquisition opportunities in turning to our 2025 guidance. As we enter the year, we are initiating a full year view estimating adjusted EPS to be within a range of $5.30 to $5.60, reflecting 12% year-over-year growth at the midpoint. Guidance assumes total core growth of 4% to 6% and approximately 12% growth in adjusted operating profit at the midpoint. We also expect a 1% to 2% sales benefit from acquisitions and around one point headwind from foreign exchange. Overall, we anticipate another very strong year in for more details on the segments. Starting with Aerospace & Electronics. No material change in end market conditions relative to our expectations, still a very strong demand the commercial side of the business, aircraft retirements remained very low due to high demand and limitations on aircraft deliveries resulting from an aging fleet that requires more aftermarket parts and the defense side, we continue to see solid procurement spending and a continued focus on reinforcing the broader defense industrial base given heightened global uncertainty today. And as Alex highlighted, we secured a substantial order for the F-16 brake control upgrade that have been highlighting on recent calls. That strong demand was also reflected in our fourth quarter growth rates with sales of $237 million, increasing 11% compared to last year with 7% core growth and a 5% benefit from the Vian with the continued high level of sales growth, our record backlog of $864 million increased even further, up 23% year-over-year, including 16% core growth and a 7% contribution from the Vian acquisition. In the quarter, total aftermarket sales increased 21% with commercial aftermarket sales, up 15% and military aftermarket, up 36%. And OEM sales increased 7% in the quarter with 10% growth in commercial, and up 3% in military. Adjusted segment margin of 23.1% increased 290 basis points from 20.2% last year, primarily reflecting higher volumes, price net of inflation and a full year basis, core sales growth of 13% exceeded our expectations for the year as well as our long-term targeted range of 7% to 9%. Adjusted operating profit of $217 million increased 36% over the prior year with adjusted operating margin expanding 310 basis points to 23.2%.Looking ahead to 2025, we anticipate core sales growth for the year to be up high single digits with that core growth leveraging at 35% to 40%. That guidance assumes continued strong sales, but with decelerating year-over-year growth rates as the comparisons become more challenging offset by the ramp in production at comparisons can create some noise on quarterly growth rates, as we have outlined previously, expect 2025's core sales growth rate to be followed by continued strong growth in 2026 and for the remainder of this decade, very confident for yet another outstanding year in Process Flow Technologies, we remain well-positioned to continue outgrowing our markets. Our site in Marion, North Carolina is well on the path to be back to its full run rate by the end of the month. For the quarter, our results included an approximate $0.09 impact from production downtime in Q4 and the higher end of our expected $0.05 to $0.10 headwind. Overall, the financial impact from the hurricane will be fully offset by insurance trends remain consistent with 2024 with moderate improvement expected in the first half and with further strengthening in the second half. In the quarter itself, we delivered sales of $307 million, up 13%, driven by core sales growth of 9% in the quarter, along with a 4% benefit from the CryoWorks and the Technifab acquisitions. Compared to prior year, core FX-neutral backlog decreased 4% based on the timing of projects and core FX-neutral orders were up 3%.Adjusted operating margin of 20.3% expanded 330 basis points better than we expected, with strong core operating leverage in the quarter, driven by productivity, strong net price, and higher a full year basis, core growth of 5% exceeded our expectations for the year and was at the high end of our long-term targeted range of 3% to 5%. Adjusted operating profit of $250 million increased 17% over the prior year, with adjusted operating margin expanding 100 basis points to 20.9%.For context, remember that in 2019, just before COVID margins were 13.6%, as we noted before, this is a significant step function change in margins, which is reflective of our efforts to structurally shift the business to higher growth in higher-margin end continue to see opportunity on this journey through contribution from accretive new product introductions, pricing that is both disciplined and appropriately assertive, our continued investments in technology-driven product differentiation, and continued ahead to 2025, we anticipate core sales growth for the year to be up low to mid-single-digits with that growth leveraging above our normal targeted 30% to 35% given expected mix, strong productivity, and pricing benefits. Another fantastic year of performance at Crane in 2024 and strong confidence in in continuing to deliver we have a number of analysts with conflicting calls this morning, a very busy morning for earnings, so the questions may be a little light this morning. And at this point, we are ready to take our first question. Operator Thank you. The floor is now open for questions. (Operator Instructions) Thank you. We'll take our first question from Nathan Jones with Stifel. Your line is open. Nathan Jones I don't know why anybody would choose another call when they get these results and the comedy show that goes along with it. Max Mitchell We appreciate it. Thanks Nathan. Nathan Jones I'll start off just with some questions on PFT. Strong growth, 8.5% in the fourth quarter, but you did burn off some backlog in the fourth quarter, which I don't think has been typical over the last few years. So, just if you could provide a little more color on the dynamics going on there. Alejandro Alcala Yes. Sure, Nathan, this is Alex. So, on the backlog, the way I think about it, our backlog grew in the first half really with some timing of project bookings, and then we're able to ship some of that that with excellent execution you see in our results. So, it did reduce a little bit in the second during the last three quarters, our orders have been sequentially pretty consistent. So the way I think about it is our backlog still finished at a really strong position. When you think about comparing it to 2019, we're up about 40%. So I think we're entering 2025 with a strong backlog and some expectations on some moderate improvements in demand, pretty confident to hit our guidance of low to mid single-digit growth PFT. Nathan Jones Thanks for that one. And maybe this is a bit of a longer-term question over the last few years. You commented -- I think it was Rich, in your comments about having moved the PFT portfolio to higher growth and higher-margin businesses, which has obviously been evident in the huge margin expansion you've seen over the last few years. Can you talk about how far you are through that process? When we might see something that approaches a bit more of an equilibrium level? I know you still intend to outgrow the market and expand margins. But at more of a steady pace rather than this what's been a huge margin expansion over the last few years. Alejandro Alcala Yes. This is Alex again. Thank you for that question. I think when you think about what we talked about in the investor conference, where we -- this has been a journey, a long journey when we have these, what we call these growth markets of chemical, pharma, wastewater and cryogenics, 2017, our mix of the portfolio was around that 30% mark. And now we're north of 60%. And we talked about in the mid-term, trying to reset 70% of our portfolio in these higher-growth markets. And that's not counting any improvements in the portfolio through also talked about line of sight, mid-20s in operating profit. So we still think there's room to improve in the mid-term. And what's going to get us there is just continuing to execute our strategy, driving this machine that we call at Crane, which starts with strategy, feeding into innovation, driving commercial excellence, which includes value pricing, some of the simplification that is giving us pricing as well and all the way through operational excellence and building our team, which is really at the end key. Nathan Jones And then I guess just one more question. Max, you talked about the industrial economy putting out some mixed signals. Maybe you could unpack that a little bit on where the signals are good, where the signals are maybe not so good if you're expecting just any changes in the cadence of any of those markets, any of those geographies? Just any detail you can give us there? Thanks. Max Mitchell Thanks, Nathan. I will add a little bit and see if Alex has some additional color as well. We're exiting the year and some projects are just as expected a little lumpy or mix timing so a leading indicator standpoint, though, things continue to be fairly strong. And of course, it's early in a new administration. And so the guidance that we've set, which we have high, high confidence on in terms of the range and being able to deliver and execute on it, I think I'm probably a little bit more bullish than not, actually, just in terms of where we are overall. The US continues to be generally a little stronger. Europe, still stagnant. China, same. I don't know, Alex, if you'd offer a little bit more about the mix commentary by segment? Alejandro Alcala Yeah. So I think we're not really seeing any particular market or region getting worse. Over the last three quarters, things have been relatively stable. So if we follow the trends, that would imply some improvement as we go into 2025. So we expect to see that. I think as Max commented, in 2024, Americas, Middle East, APAC were growing, and Europe and China were deteriorating but stable, we expect to see a similar dynamic from a regional standpoint. I think in our vertical markets, cryogenics, which is our new business, continues to see strong demand. We expect chemical, we're seeing projects on upgrades, efficiency improvements, capacity expansions moving through the funnel, pharmaceutical as well. So I think a similar type of activity by markets and regions, but some improvement expected in 2025. Operator Matt Summerville, D.A. Davidson. Matt Summerville Maybe, Max, you mentioned in your prepared remarks that you've recently been on site doing some diligence on a couple of potential deals. Can you maybe comment a little bit around the quality of the assets you're looking at the types of assets, the segments, the size? And then also maybe kind of compare and contrast what you've seen recently versus what you see coming available to the market over the course of the year? And then I have a couple of follow-ups. Max Mitchell Yeah. Generally, one in A&E, one in PFT, I would say, the value, enterprise value in the hundreds of millions dollars range to $100 million less. So that sweet spot we kind of see high-quality businesses without a doubt. I would almost say consistent with what we're seeing as we're moving forward. So generally pleased with the type of assets that we're looking at as well as those that we expect to come to fruition, some larger, a little larger but still in our targeted sweet spot that we expect to come to market as well. That's how I'd frame it up. Would you add anything different, Rich? Richard Maue No, I think that's right. I think, fitting nicely with our strategy on the two in particular that we are looking at and as well for the ones coming up when you think about the targeted end markets that we're focused on, higher growth, the margin potential being there, cash flow accretion being there and so forth. Matt Summerville Got it. With respect to A&E and the high single-digit organic, you're sort of projecting this year, can you maybe help parse out a little bit, compare and contrast maybe what the assumptions are for commercial between OE and aftermarket and then similarly military between OE and aftermarket and ultimately, how you're thinking about the MAX restart and how you've kind of incorporated that into your commercial OE view? Richard Maue So I'll give you the pieces, Matt, here in terms of how we're thinking about next year. For commercial OE, right now, we are at low double-digit is our current view. Military OE is mid-single-digit, commercial aftermarket mid- to high single digit. And military aftermarket, the same, mid- to high single digit. That's what we've included in our guidance range for you guys this morning. Max Mitchell I think in terms of the MAX start-up or continued recovery, we based our guidance on previously communicated ramp rates that I think are fairly achievable conservative. So we understand that Boeing signaling some accelerated potential there, which is great news. And if so, then we'll be prepared to benefit from that as well. Matt Summerville And then maybe last question, when you kind of pull together what you said in the prepared remarks and Q&A, Rich, can you maybe help a little bit with how we should be thinking about the overall quarterly earnings cadence as we move through the year in 2025 for Crane overall? Richard Maue Sure. So I mean, on balance, it's roughly 50-50 first half, second half. The first quarter will be seasonally, I would say, the lowest, if that helps you, Matt. I think you should be able to square that off with your model. Matt Summerville And then how does -- yes. So I guess just one quick follow-up to that. The business interruption insurance recovery, how much in total do you expect on a per share basis? Is that fully baked in the guide? And where should we be kind of thinking about having that in numbers, so to speak? Alejandro Alcala We expect the recovery should be something similar to the income that was lost in the second half of last year. From a timing perspective, we would expect to receive that probably in the second quarter this year, potentially the third. And yes, it's included in that. Operator Jordan Lyonnais, Bank of America. Jordan Lyonnais For the margins for 2025, could you give us details on how you're thinking about mix of pricing versus volume and overhead absorption? Richard Maue Yes. So look, our overall guide has got some -- it's a pretty healthy overall leverage rate, as you probably calculated north of, I think, on average, what we would expect given our algorithm that we've previously communicated. Look, the way to think about price in our guide, we're going to more than offset inflation as a baseline. I think that goes without saying. And then we're going to continue to do all the -- continue all the right work we have been with respect to value pricing and other initiatives in that regard as we move terms of absorption and the facilities, those volumes will come in and they will leverage at each respective businesses leverage rate, and that is baked into that 40%. I think it's a little bit north of 40% on the guide. Jordan Lyonnais Okay. Got it. And then also to -- are you guys you guys concerned at all for any of the exposure have in China for PFT and those programs are ramping if the new administration does go through with aggressive tariffs and potential retaliation from the China side? Max Mitchell I have very little concern. I think our position in China, from our localization content is not so material. We understand the supply base. We've been very, very effective in managing inflationary measures. I think we're not going to overreact. I'm not that concerned. I'm not going to overreact. We're going to wait and see what happens. And I think we're well prepared to address whatever measures get put in place. That's how I'm thinking about it, Jordan. Operator Justin Ages, CJS Securities. Justin Ages Just a quick housekeeping one to start. Is there any transaction related expenses we should be thinking about going forward or no, given the Jan 2nd closed on Engineered Materials? Alejandro Alcala No. Yeah. No, nothing. And if they were transaction expenses, they are usually treated as non-GAAP anyway, but nothing related to Engineered Materials. Richard Maue Yeah, and I would say that obviously, most of the work was done prior to the end of the year since we closed in the early January. So we have a modest TSA arrangement in place, and it will be a very fast separation. Justin Ages Okay. And then on the prior couple of earnings calls, you guys called out some work on the nuclear side in the valves. Just wondering if you're continuing to see good demand there? Or just wanted to get a sense if that's changed since the election? Max Mitchell It's less material for us overall, but it's still an important business. What's our percentage of total revenue, 7%. Just as a reminder to our investors, we have valve services, nuclear valve services we provide, new plant in construction, the AP1000, we've supplied valves, as well as turnaround work. When a nuclear power plant goes down for shutdown and gets refueled, there's regulatory requirements for going in and refurbing and inspecting the valves. We have a company that provides that service, a very, very good business. And certainly, the resurgence and reopening of nuclear plants has been favorable for us for this addition, any time that you see the most recent announcement also that there's interest in restarting plants, we benefit as well on the plant start-up with helping to get it back up in order. So we're seeing that team is working with next-gen small modular reactor providers to help get specified. This goes out many, many years, of course, from a long cycle standpoint. But to get specified into new plant construction from that standpoint as well, so less material for us, but a great little business and benefiting for sure with the nuclear resurgence overall. Operator Thank you. (Operator Instructions) Tony Bancroft, Gabelli Funds. Tony Bancroft Good morning team. Congratulations, Alex, on the promotion, very well deserved. I'm sure your first task, Max will have you heading out to the Catalina Wine Mixer to snap the necks and the cash checks. Max Mitchell Rich wanted to start a new company called Prestige Worldwide. Tony Bancroft Boy, what a great, it would be wonderful wonders. So, now your $10 billion company, you've grown, you've had extreme performance over the last few years, you've done your portfolio cleaning. And I think you sort of look out and say this is -- what's next for this company. And is there any -- and I know you've talked about sort of the longer term of the Aero and PFT growing that that to the appropriate do you have some competitors are has similar businesses to you. Is there any opportunity to do something larger or more transformational? Do you ever think about that? Does that sort of get into your conversations on sort of large-scale planning? Just any thoughts on that, Max. Max Mitchell Thanks for that, Tony. I really appreciate it. For sure. I mean, we go through a range of strategic planning on a regular basis that takes into consideration all permutations and scenarios. I don't -- we certainly don't want to say that it's something that we have clearly set our sights on. I don't want to, in any way, concern we do is going to make sense. It's going to be right down the sweet spot. It's going to be something that we can clearly integrate and do well. But we've looked at some larger assets as well. And we continue -- we can even consider, not just cash, but does it ever make sense to use our equity as the currency also. Not something that we've got teed up in the immediate future, but things that we look at we were looking -- we will continue to look at all opportunities to continue to drive shareholder value, and some of those are larger opportunities that could be quite synergistic. Operator Thank you. This concludes the Q&A portion of today's call. I would now like to turn the floor over to Max Mitchell for closing remarks. Max Mitchell Thank you, operator. Hey, again, yet another strong year with results outperforming expectations, even with surprises outside our control that our teams reacted to incredibly well.2024 proved that our strategy is working, the team is executing, driving improved earnings through its growth and commercial excellence initiatives. Our M&A pipeline is full and we have the balance sheet capacity to execute. We're well-positioned for continued growth and delivering on expectations in 2025 and look forward to another hugely successful look forward to seeing many of you on Wednesday evening and Thursday, March 5th and 6th, at our Investor Day, in Fort Walton Beach, Florida, where we will highlight the machine we have in place with our holistic Crane business system strategy, discipline, cadence, and the late great Quincy Jones said, "Every day, my father told me the same thing. Once a task has just begun, never leave it until it's done. Be the labor great or small, do it well or not at all." Right, Alex? Alejandro Alcala Absolutely. Max Mitchell At Crane, we sweat the small details in our culture and business system because our team knows that this adds up to outsized results and performance and execution and driving profitable you all for your interest in Crane and your time and attention this morning. Have a great day. Operator Thank you. This concludes today's Crane Company fourth quarter and full year 2024 earnings conference call. Please disconnect your line at this time and have a wonderful day.
