Crane Company Q4 FY2025 earnings call

• Acquisitions: Closed on the acquisition of Druck, Panametrics, Reuter-Stokes brands on January 1st, with Reuter-Stokes doubling the size of Crane's nuclear business; acquired optek-Danulat in January.
• Business Integration: Integration process of acquisitions is well underway, and the teams have hit the ground running.
• Management Transition: Max will serve as Executive Chairman effective April 27th, 2026, and Alex Alcala will become the next CEO.
• 2025 Performance: Adjusted EPS of $1.53 was up 21% over the prior year, driven by 5.4% core sales growth; full-year adjusted EPS increased by 24% due to strong teams delivering on customer expectations and sustained investments in advanced technologies.

Aerospace & Advanced Technologies

• Quarter sales: $272 million, up 15% in the quarter, nearly all organic.
• Backlog: Record backlog of just over $1 billion, up 25% year-over-year and slightly sequentially.
• Core orders: Up 8%.
• Adjusted segment margin: 23.6%, expanding 50 basis points from 23.1% last year, primarily due to strong productivity, higher volumes and higher price net of inflation.

Process Flow Technologies

• Q4 sales: $309 million, flat relative to a year ago with core sales down 1.5% (offset by a slight benefit from the Technifab acquisition and 1.6 points of favorable FX).
• Core FX-neutral backlog: Decreased 7%.
• Core FX-neutral orders: Remained soft, down 3% driven by weaker chemical end markets.
• Adjusted operating margin: 22%, expanded 170 basis points from the prior year.

• 2026 adjusted EPS guidance: $6.55 to $6.75, a solid 10% adjusted EPS growth at the midpoint, excluding $0.16 benefit of onetime hurricane-related insurance recoveries in 2025 and after-tax acquisition-related intangible amortization in both years.
• Acquisitions are estimated to be slightly accretive to 2026 earnings results.
• Q1 2026 is expected to be seasonally softest quarter, roughly flat with Q1 2025, lower than historical patterns due to acquisition integration and increased interest expense.
• Full year 2026 earnings split: First half expected to represent about 45% of full year earnings with 55% weighted towards the second half.

• Integration risks related to the acquired businesses, such as challenges in fully integrating and realizing synergies as expected.
• Market environment risks, including potential impacts from economic fluctuations, changes in customer demand, and competition affecting segment performance.

Q: What are you going to do about your free time here?

A: I'm going to remain busy, very, very busy. In addition to Executive Chair, I've become a very popular Gen X influencer with my podcast and fan page.

Q: Can you speak to the pricing opportunity at drop in 2026 and 2027 and specifically about meaningful LTAs coming up for renewal this year or next?

A: In our financial model, we assume significant opportunity in Druck, Panametrics, and Reuter-Stokes. There's opportunity to do better in all 3 businesses, with improvements starting this year and reading more into next year. No real obstacles to achieve goals in that area.

Q: With the renaming of A&E to A&T, can you go into more details in terms of what adjacent tech and strategic direction this is actually referring to?

A: Our business unit Aerospace & Electronics was both business unit name and segment name. Renaming to A&T positions us to do more deals like Druck, expanding into adjacent tech and strategic directions with differentiated technologies.

Q: Can you talk about 2026 with respect to the Aerospace segment, what you're expecting from an aftermarket volume standpoint for both OEM and military?

A: Commercial OEM will continue to be strong, high teens; Military OEM, mid-single digits. On the commercial side, anticipating mid-single digits for aftermarket; on the military side, mid- to high single digits. No other real impact from government shutdown currently seen.