8-K - CXT - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 10, 2023

CRANE NXT, CO.

(Exact name of registrant as specified in its charter)

DELAWARE

(State or other jurisdiction of incorporation)

Delaware	1-1657	88-0706021
(State or other jurisdiction of<br> <br>incorporation or organization)	(Commission<br> <br>File Number)	(I.R.S. Employer<br> <br>Identification No.)
950 Winter Street 4^th^ Floor<br> <br>Waltham, MA	02451
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(Address of Principal Executive Offices)	(Zip Code)

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

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:

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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ☐

Item 2.02	Results of Operations and Financial Condition.

On May 10, 2023, Crane NXT, Co. announced its results of operations for the quarter ended March 31, 2023. The related press release and quarterly financial data supplement is being furnished as Exhibit 99.1 hereto.

The information furnished under Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, is not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

Item 9.01	Financial Statements and Exhibits.
(a)	The Unaudited Condensed Combined Financial Statements of Crane NXT (A Business of Crane Holdings, Co.), as of March 31, 2023 and for the three months ended March 31, 2023 and 2022, are attached as Exhibit 99.2 hereto and are incorporated into this Item 9.01(a) by reference.
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Due to Crane Company’s larger operations, greater tangible assets, greater fair value and greater net sales, in each case, relative to Crane NXT, Co., among other factors, Crane Company will be treated as the “accounting spinnor” and therefore will be the “accounting successor” to Crane Holdings, Co. for accounting purposes, notwithstanding the legal form of the Crane Holdings, Co.’s separation into two independent, public companies, which was completed on April 3, 2023 (the “Spin-Off”). Therefore, following the Spin-Off, the historical consolidated financial statements of Crane Company will reflect the historical consolidated financial statements of Crane Holdings, Co., and Crane NXT, Co.’s historical financial statements are comprised solely of combined carve-out financial statements representing only those operations, assets, liabilities and equity of Crane NXT, Co., on a stand-alone basis derived from the consolidated financial statements and accounting records of Crane Holdings, Co. Accordingly, the historical financial information incorporated into this Item 9.01(a) does not necessarily reflect the financial condition, results of operations or cash flows that Crane NXT, Co. would have achieved as a separate, publicly traded company during the periods presented, nor does it necessarily reflect those that Crane NXT, Co. will achieve in the future.

(b)	None
(c)	None
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(d)	Exhibits
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Exhibit<br>No.	Exhibit
---	---
99.1	Earnings Press Release dated May 10, 2023 and Crane NXT, Co. Quarterly Financial Data Supplement for the quarter ended March 31, 2023.
99.2	Unaudited Condensed Combined Financial Statements of Crane NXT (A Business of Crane Holdings, Co.) as of March 31, 2023 and for the three months ended March 31, 2023 and 2022.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CRANE NXT, CO.
May 10, 2023
	By:	/s/ Christina Cristiano
		Name: Christina Cristiano
		Title: Senior Vice President, Chief Financial Officer

EX-99.1

Exhibit 99.1
Contact:
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Jason D. Feldman
Vice President, Investor Relations<br> <br><br><br><br>203-363-7329<br><br><br><br> <br>www.cranenxt.com

Crane NXT, Co. Reports Strong First Quarter 2023 Results and Raises Full-Year Outlook

First Quarter Highlights

•	Standalone GAAP earnings per diluted share (EPS) of $0.76, and Adjusted EPS of $0.97.
•	First quarter core sales growth of 3% and core backlog growth of 34%^1^.<br>
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•	GAAP operating profit margin of 20.0%, and Adjusted operating profit margin of 23.3%.
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•	Raising full year Adjusted EPS guidance to a range of $3.75 to $4.05, from prior range of $3.65 to $3.95.<br>
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•	Declaring second quarter dividend of $0.14 per share.
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WALTHAM, MA - May 10, 2023 - Crane NXT, Co. (NYSE: CXT) (“Crane NXT” or the “Company”), a premier industrial technology company today announced its stand-alone financial results for the first quarter of 2023.

On April 3, 2023, Crane Holdings, Co. completed the separation of its wholly-owned subsidiary at that time, Crane Company, in a tax-free distribution of Crane Company shares to Crane Holdings, Co. stockholders, and changed its name to Crane NXT, Co. Historical financial measures in this release for Crane NXT are presented on a carve-out basis; consolidated results of Crane Holdings, Co. as of March 31, 2023 and December 31, 2022 and for the three months ended March 31, 2023 and 2022 are included as an appendix to this release.

^1^ References to “core sales,” “core backlog” and “core growth” exclude currency effects and, where applicable, the first-year impacts of acquisitions and divestitures.

Aaron W. Saak, Crane NXT’s President and Chief Executive Officer stated: “Following our successful separation transaction last month, Crane NXT is off to a great start as an independent company based on our strong first quarter results. Our performance is indicative of our position as a premier industrial technology company with differentiated technology and leading market positions focused on providing trusted technology solutions to secure, detect, and authenticate our customers’ most valued assets. Our businesses’ strength is paired with a solid and flexible balance sheet, as well as a talented team that is energized and excited about the opportunities that lie ahead of us.”

Mr. Saak continued: “Our first quarter revenue and operating profit was stronger than anticipated, with 10% core sales growth at Crane Payment Innovations accompanied by significant margin expansion driven by our focus on continuous improvement through deployment of the Crane Business System (CBS). Crane Currency’s results were in line with our forecast and guidance, driven by timing of shipments through the balance of 2023. The strong orders and backlog growth in Crane Currency in the quarter supports our expectations of accelerating sales and margin expansion as the year progresses. As a result of our strong first quarter results, we are raising the midpoint of our adjusted EPS guidance range by $0.10 to a range of $3.75-$4.05.”

First Quarter 2023 Segment Results

All comparisons detailed in this section refer to operating results for the first quarter 2023 versus the first quarter 2022.

Crane Payment Innovations

		Three Months Ended<br>March 31,						Change
(dollars in millions)		2023			2022				%
Net sales	$	224		$	211		$	13	6 %
Core sales							$	22	10 %
Foreign exchange							$	(9	(4)%
Operating profit	$	62		$	49		$	13	27 %
Adjusted operating profit*		67			55		$	12	22 %
Operating profit margin		27.6	%		23.2	%			440bps
Adjusted operating profit margin*		30.1	%		25.9	%			420bps

All values are in US Dollars.

*Please see the attached Non-GAAP Financial Measures tables

Sales of $224 million increased $13 million, or 6%, compared to the prior year, driven by 10% core sales growth, partially offset by 4% of unfavorable foreign exchange. Operating profit margin of 27.6% compared to 23.2% last year, primarily reflecting strong pricing and productivity, partially offset by slightly unfavorable mix. Adjusted operating profit margin of 30.1% compared to 25.9% in the prior year.

Crane Currency

		Three Months Ended<br>March 31,						Change
(dollars in millions)		2023			2022			$	%
Net sales	$	105		$	122		$	(16)	(13)%
Core sales							$	(13)	(10)%
Foreign exchange							$	(3)	(3)%
Operating profit	$	18		$	35		$	(18)	(50)%
Adjusted operating profit*	$	21		$	39		$	(18)	(45)%
Operating profit margin		16.7	%		28.9	%			NM
Adjusted operating profit margin*		20.1	%		31.9	%			NM
*Please see the attached Non-GAAP Financial Measures<br>tables

Sales of $105 million decreased $16 million, or 13%, compared to the first quarter of 2022, driven by a 10% core sales decline and a 3% impact from unfavorable foreign exchange. Operating profit margin was 16.7% as compared to 28.9% last year, primarily reflecting the impact of lower volume and unfavorable mix. Adjusted operating profit margin was 20.1% compared to 31.9% in the prior year.

Cash Flow and Other Financial Metrics

During the first quarter of 2023, cash provided by operating activities was $36 million, capital expenditures were $4 million, free cash flow was $32 million, and Adjusted free cash flow was $33 million. (Please see the attached Non-GAAP Financial Measures tables for definitions of free cash flow and Adjusted free cash flow).

As of March 31, 2023, the Company held cash of $218 million and total debt was $1,191 million. Subsequent to the quarter-end, Crane NXT received a cash dividend from Crane Company of $275 million, and it used the proceeds of that dividend, along with cash on hand, to repay the $300 million of 4.45% notes due in December 2023.

As of April 4, 2023, the Company held cash of approximately $270 million, reflecting an additional approximately $80 million of cash which was transferred to Crane NXT as part of the separation, and total debt was $891 million.

Christina Cristiano, Crane NXT’s Senior Vice President and Chief Financial Officer, added: “Following our recent separation transaction, Crane NXT has a very strong balance sheet, paired with consistent, robust free cash flow generation. This gives us significant flexibility to pursue the substantial opportunities we have to grow both organically and through acquisitions.”

2023 Updated Outlook andGuidance

The Company is revising its full year 2023 Adjusted EPS guidance range to $3.75 to $4.05, from the prior range of $3.65-$3.95, primarily to reflect the strong first quarter results.

Key assumptions for the Company’s revised guidance include:

•	Core sales growth of +2% to +4% (unchanged).
•	Adjusted segment margin of 27%+ (prior 27.1%).
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•	Corporate costs of $50 million (unchanged).
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•	Net non-operating expense of $50 million (prior $45 million).<br>
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•	Adjusted tax rate of ~20% (unchanged).
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•	Diluted shares of ~57.3 million (unchanged).
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Additional details of the Company’s outlook and guidance are included in the presentation that accompanies this earnings release and are available on the Company’s website at www.cranenxt.com under the “Investors, Events & Presentation” section.

Declaring Second Quarter Dividend

Crane NXT announced its quarterly dividend of $0.14 per share for the second quarter of 2023. The dividend is payable on June 8, 2023 to shareholders of record as of May 31, 2023.

Conference Call

Crane NXT scheduled a conference call to discuss the first quarter financial results on Thursday, May 11, 2023, at 11:30 A.M. (Eastern). All interested parties may listen to a live webcast of the call at www.cranenxt.com. An archived webcast will also be available to replay this conference call directly from the Company’s website under the “Investors, Events & Presentations” section. Slides that accompany the conference call will be available on the Company’s website.

About Crane NXT, Co.

Crane NXT is a premier industrial technology company that provides trusted technology solutions to secure, detect, and authenticate what matters most to its customers. Crane NXT is a pioneer in advanced micro-optics technology for securing physical products, and its sophisticated electronic equipment and associated software leverages proprietary core capabilities with detection and sensing technologies. Crane NXT has approximately 4,000 employees with global operations and manufacturing facilities in the United States, the United Kingdom, Mexico, Japan, Switzerland, Germany, Sweden, and Malta. For more information, visit www.cranenxt.com.

Forward-Looking Statements Disclaimer

This press release containsforward-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 the Company’s intent, belief, or expectations,including, but not limited to: statements regarding Crane NXT’s portfolio composition and its relationship with Crane Company following the business separation; benefits and synergies of the separation transaction; strategic and competitiveadvantages of Crane NXT; future financing plans and opportunities; and business strategies, prospects and projected operating and financial results. The Company cautions investors not to place undue reliance on any such forward-looking statements.

Words such as “anticipate(s),” “expect(s),” “intend(s),” “believe(s),” “plan(s),” “may,”“will,” “would,” “could,” “should,” “seek(s),” and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements. These statements are based onmanagement’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 the Company believes that theassumptions underlying the forward-looking statements are reasonable, it can give no assurance that its expectations will be attained.

Risks anduncertainties that could cause actual results to differ materially from the Company’s expectations include, but are not limited to: changes in global economic conditions (including inflationary pressures) and geopolitical risks, includingmacroeconomic fluctuations that may harm its business, results of operation and stock price; the continuing

effects from the COVID-19 pandemic on its business and the global and U.S. economies generally; information systems and technology networks failures andbreaches in data security, theft of personally identifiable and other information, non-compliance with its contractual or other legal obligations regarding such information; its ability to source componentsand raw materials from suppliers, including disruptions and delays in its supply chain; demand for its products, which is variable and subject to factors beyond its control; governmental regulations and failure to comply with those regulations;fluctuations in the prices of its components and raw materials; loss of personnel or being able to hire and retain additional personnel needed to sustain and grow its business as planned; risks from environmental liabilities, costs, litigation andviolations that could adversely affect its financial condition, results of operations, cash flows and reputation; risks associated with conducting a substantial portion of its business outside the U.S.; being unable to identify or completeacquisitions, or to successfully integrate the businesses the Company acquires, or complete dispositions; adverse impacts from intangible asset impairment charges; potential product liability or warranty claims; being unable to successfully developand introduce new products, which would limit its ability to grow and maintain its competitive position and adversely affect its financial condition, results of operations and cash flow; significant competition in the Company’s markets;additional tax expenses or exposures that could affect its financial condition, results of operations and cash flows; inadequate or ineffective internal controls; specific risks relating to the Company’s reportable segments, including CranePayment Innovations and Crane Currency; the ability and willingness of Crane NXT and Crane Company to meet and/or perform their obligations under any contractual arrangements that are entered into among the parties in connection with the separationtransaction 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 the Company expects to achieve fromthe separation transaction.

Readers should carefully review Crane NXT, Co.’s financial statements and the notes thereto, as well as the section entitled“Risk Factors” in Item 1A of Crane NXT, Co.’s Annual Report on Form 10-K for the year ended December 31, 2022 and the other documents Crane NXT Co.’s and its subsidiaries file fromtime 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.

These forward-looking statements reflect management’s judgment as of this date, and Crane NXT assumes no (and disclaims any) obligation to revise or update themto reflect future events or circumstances.

The Company makes no representations or warranties as to the accuracy of any projections, statements orinformation contained in this document. 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 andother risks, uncertainties and contingencies many of which are beyond its 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 resultsand that such differences may be material. While all financial projections, estimates and targets are necessarily speculative, the Company believes that the preparation of prospective financial information involves increasingly higher levels ofuncertainty 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 risksand 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 beregarded as an indication that the Company or its representatives, considered or consider the financial projections, estimates and targets to be a reliable prediction of future events.

(Financial Tables Follow)

CRANE NXT (A BUSINESS OF CRANE HOLDINGS, CO.)

Condensed Combined Statements of Operations Data

(unaudited, in millions, except per share data)

	Three Months Ended<br><br><br>March 31,
	2023			2022
Net sales:
Crane Payment Innovations	$	223.8		$	211.0
Crane Currency		105.3			121.6
Total net sales	$	329.1		$	332.6
Operating profit (loss):
Crane Payment Innovations	$	61.8		$	49.0
Crane Currency		17.6			35.2
Corporate		(13.5	)		(7.3	)
Total operating profit	$	65.9		$	76.9
Interest income		0.2			—
Interest expense		(10.4	)		(10.5	)
Related party interest expense		(2.5	)		(3.7	)
Miscellaneous income, net		1.4			0.8
Income before income taxes		54.6			63.5
Provision for income taxes		10.9			14.0
Net income attributable to common shareholders	$	43.7		$	49.5
Earnings per diluted share^1^	$	0.76		$	0.85
Average diluted shares outstanding^1^		57.3			57.9
Average basic shares outstanding^1^		56.5			57.1
Supplemental data:
Cost of sales		174.4			179.1
Selling, general and administrative		88.8			76.6

^1^The shares presented are those of Crane Holdings, Co. at March 31, 2023, for purposes of calculating earnings per diluted share of Crane NXT.

CRANE NXT (A BUSINESS OF CRANE HOLDINGS, CO.)

Condensed Combined Balance Sheets

(unaudited, in millions)

		December 31,2022
Assets
Current assets:
Cash and cash equivalents	218.2	$	230.7
Accounts receivable, net of allowance for credit losses of 10.1 as of March 31, 2023 and 6.1 as of December 31,<br>2022	185.3		205.1
Inventories, net	158.7		145.6
Other current assets	47.1		41.9
Total current assets	609.3		623.3
Property, plant and equipment, net	257.9		261.6
Long-term deferred tax assets	6.2		6.3
Other assets	59.4		56.7
Intangible assets, net	335.9		344.9
Goodwill	837.8		836.6
Total assets	2,106.5	$	2,129.4
Liabilities and Crane net investment
Current liabilities:
Short-term borrowings	308.5	$	299.7
Accounts payable	96.0		109.6
Accrued liabilities	180.3		204.2
U.S. and foreign taxes on income	24.4		17.9
Total current liabilities	609.2		631.4
Long-term debt	882.0		545.1
Accrued pension and postretirement benefits	20.1		21.1
Long-term deferred tax liability	112.4		109.5
Other liabilities	41.7		38.5
Crane net investment	441.1		783.8
Total liabilities and Crane net investment	2,106.5	$	2,129.4

All values are in US Dollars.

CRANE NXT (A BUSINESS OF CRANE HOLDINGS, CO.)

Condensed Combined Statements of Cash Flows

(unaudited, in millions)

	Three Months Ended<br><br><br>March 31,
	2023			2022
Operating activities:
Net income attributable to common shareholders	$	43.7		$	49.5
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization		19.0			19.9
Stock-based compensation expense		2.3			2.1
Defined benefit plans and postretirement credit		(0.2	)		—
Deferred income taxes		3.1			4.0
Cash used for operating working capital		(28.7	)		(46.7	)
Other		(3.7	)		1.0
Total provided by operating activities	$	35.5		$	29.8
Investing activities:
Capital expenditures		(4.0	)		(2.5	)
Total used for investing activities	$	(4.0	)	$	(2.5	)
Financing activities:
Debt issuance costs		(4.0	)		—
Proceeds from term loan		350.0			—
Net transfers to Parent		(392.6	)		(22.9	)
Total used for financing activities	$	(46.6	)	$	(22.9	)
Effect of exchange rate on cash and cash equivalents		2.6			(2.3	)
(Decrease) increase in cash and cash equivalents		(12.5	)		2.1
Cash and cash equivalents at beginning of period		230.7			101.2
Cash and cash equivalents at end of period	$	218.2		$	103.3

CRANE NXT (A BUSINESS OF CRANE HOLDINGS, CO.)

Order Backlog

(unaudited, in millions)

	March 31,2023		December 31,<br><br><br>2022		September 30,<br><br><br>2022		June 30,2022		March 31,<br><br><br>2022
Crane Payment Innovations	$	348.7	$	372.9	$	373.6	$	386.8	$	339.7
Currency		207.3		192.7		126.2		95.2		89.3
Total backlog	$	556.0	$	565.6	$	499.8	$	482.0	$	429.0

Revenue

(unaudited, in millions)

	Three Months Ended March 31
	2023				%
Net sales		329	$333	)		(1)%
Core sales						3%
Foreign exchange				)		(4)%

All values are in US Dollars.

CRANE NXT (A BUSINESS OF CRANE HOLDINGS, CO.)

Non-GAAP Financial Measures

(unaudited, in millions, except per share data)

					** <br> <br>**
	2023
Adjusted Operating Profit and Adjusted Operating Profit Margin			Per Share
Net sales (GAAP)
Operating profit (GAAP)
Operating profit margin (GAAP)		%
Special items impacting operating profit:
Intangible asset amortization
Transaction related expenses
Adjusted operating profit (Non-GAAP)
Adjusted operating profit margin (Non-GAAP)		%
Adjusted Net Income and Adjusted Net Income per Share
Net income attributable to common shareholders (GAAP)			$	0.76
Intangible asset amortization				0.17
Transaction related expenses				0.03
Interest adjustment^1^				0.04
Tax effect of the Non-GAAP adjustments		)		(0.03	)
Adjusted net income (Non-GAAP)			$	0.97
Adjusted EBITDA and Adjusted EBITDA margin
Net income attributable to common shareholders (GAAP)
Net income margin (GAAP)		%
Adjustments to net income attributable to common shareholders:
Income tax expense
Interest expense, net
Depreciation
Intangible asset amortization
Transaction related expenses
Adjusted EBITDA (Non-GAAP)
Adjusted EBITDA Margin (Non-GAAP)		%

All values are in US Dollars.

Totals may not sum due to rounding

^1^ Pre-separation related party interest with Crane Company, a business of Crane Holdings, Co., at March 31, 2023.

CRANE NXT (A BUSINESS OF CRANE HOLDINGS, CO.)

Non-GAAP Financial Measures by Segment

(unaudited, in millions)

Three Months Ended March 31, 2023	Crane PaymentInnovations			Crane Currency			Corporate			Total Company
Net sales	$	223.8		$	105.3		$	—		$	329.1
Operating profit (loss) (GAAP)	$	61.8		$	17.6		$	(13.5	)	$	65.9
Operating profit margin (GAAP)		27.6	%		16.7	%					20.0 %
Special items impacting operating profit:
Intangible asset amortization		5.5			3.6			—			9.1
Transaction related expenses		—			—			1.8			1.8
Adjusted operating profit (non-GAAP)	$	67.3		$	21.2		$	(11.7	)	$	76.8
Adjusted operating profit margin (non-GAAP)		30.1	%		20.1	%					23.3 %
Three Months Ended March 31, 2022	Crane PaymentInnovations			Crane Currency
---	---	---	---	---	---
Net sales	$	211.0		$	121.6
Operating profit (GAAP)	$	49.0		$	35.2
Operating profit margin (GAAP)		23.2	%		28.9 %
Special items impacting operating profit:
Intangible asset amortization		5.6			3.6
Adjusted operating profit (non-GAAP)	$	54.6		$	38.8
Adjusted operating profit margin (non-GAAP)		25.9	%		31.9 %

Totals may not sum due to rounding

CRANE NXT (A BUSINESS OF CRANE HOLDINGS, CO.)

Free Cash Flow

(unaudited, in millions, except per share data)

	Three Months EndedMarch 31,
Cash Flow Items	2023
Cash provided by operating activities (GAAP)	$	35.5
Less: Capital expenditures		(4.0)
Free cash flow	$	31.5
Transaction related expenses ^(a)^		1.8
Adjusted free cash flow (non-GAAP)	$	33.3

^(a) Represents transaction related expenses associated with the separation.^

Crane NXT 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 margin, Adjusted EPS, 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. The Company’s management believes that these non-GAAP measures of financial results (including on a forward-looking or projected basis) provide useful supplemental information to investors about Crane NXT. 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 the Company’s 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, including Adjusted segment margin and Adjusted EPS, 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 Crane NXT’s future GAAP results. Crane NXT calculates Adjusted segment margin and Adjusted EPS as described below.

•	“Adjusted segment margin” is calculated as Adjusted segment profit divided by sales. Adjusted segment profit is<br>calculated as segment profit excluding intangible asset amortization and transaction related expenses such as tax charges, professional fees, and incremental costs related to the separation.
•	“Adjusted EPS” is calculated as Adjusted net income divided by diluted shares. Adjusted net income is calculated<br>as net income excluding intangible asset amortization and transaction related expenses such as tax charges, professional fees, and incremental costs related to the separation.
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The Company’s management believes 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 the Company’s core performance, some of which may or may not be non-recurring, and which management believes may complicate the interpretation of the Company’s underlying earnings and operational performance. These items include income and expense such as: intangible asset amortization and transaction related expenses. 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. Management believes 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 the Company’s core<br>performance, some of which may or may not be non-recurring, and which management believes may complicate the presentation of the Company’s underlying earnings and operational performance. These measures<br>include income and expense items that impacted operating profit such as: intangible asset amortization and transaction related expenses. Additionally, these non-GAAP financial measures exclude income and<br>expense items that impacted net income and earnings per diluted share such as: pre-separation related party interest expense. These items are not incurred in all periods, the size of these items is difficult<br>to predict, and none of these items are indicative of the operations of the underlying businesses. Management believes that non-GAAP financial measures that exclude these items provide investors with an<br>alternative metric that can assist in predicting future earnings and profitability that are complementary to GAAP metrics.
•	“Free cash flow” and “Adjusted free cash flow” provide supplemental information to assist management and<br>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<br>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 is calculated as free cash<br>flow adjusted for certain cash items which management believes may complicate the interpretation of the Company’s underlying free cash flow performance such as certain transaction related cash flow items related to 2022 portfolio actions. These<br>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. Management believes that non-GAAP<br>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.
---	---
•	“Adjusted EBITDA” and “Adjusted EBITDA margin” excludes net interest expense, tax expense and<br>depreciation and amortization expense from net income, as well as Special items such as transaction related expenses. Management believes that non-GAAP financial measures that exclude these items provide<br>investors with an alternative metric that can assist in predicting future earnings and profitability that are complementary to GAAP metrics.
---	---

Appendix

CRANE HOLDINGS, CO.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months Ended
	March 31,
(in millions, except per share data)	2023			2022
Net sales	$	842.9		$	871.5
Operating costs and expenses:
Cost of sales		481.3			526.2
Selling, general and administrative		209.4			198.3
Operating profit		152.2			147.0
Other (expense) income:
Interest income		1.0			0.3
Interest expense		(17.0	)		(11.1	)
Miscellaneous (expense) income, net		(2.4	)		3.5
Total other expense, net		(18.4	)		(7.3	)
Income before income taxes		133.8			139.7
Provision for income taxes		28.1			34.7
Net income attributable to common shareholders	$	105.7		$	105.0
Earnings per share:
Basic	$	1.87		$	1.84
Diluted	$	1.84		$	1.81
Average shares outstanding:
Basic		56.5			57.1
Diluted		57.3			57.9
Dividends per share	$	0.47		$	0.47

CRANE HOLDINGS, CO.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in millions)		December 31,2022
Assets
Current assets:
Cash and cash equivalents	510.2	$	657.6
Accounts receivable, net of allowance for doubtful accounts of 16.9 as of March 31, 2023 and 14.1 as of December 31,<br>2022	499.5		474.7
Inventories, net:
Finished goods	106.0		83.3
Finished parts and subassemblies	74.5		70.7
Work in process	42.3		39.9
Raw materials	270.1		245.9
Inventories, net	492.9		439.8
Other current assets	193.2		179.8
Total current assets	1,695.8		1,751.9
Property, plant and equipment:
Cost	1,268.9		1,250.8
Less: accumulated depreciation	760.9		740.9
Property, plant and equipment, net	508.0		509.9
Long-term deferred tax assets	9.9		8.3
Other assets	184.9		176.0
Intangible assets, net	406.5		416.6
Goodwill	1,530.9		1,527.5
Total assets	4,336.0	$	4,390.2

All values are in US Dollars.

CRANE HOLDINGS, CO.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in millions, except per share and share data)	March 31,2023	****	****	December 31,2022	****
Liabilities and equity
Current liabilities:
Short-term borrowings	308.5		$	699.3
Accounts payable	247.1			286.6
Accrued liabilities	395.9			464.2
U.S. and foreign taxes on income	23.0			38.1
Total current liabilities	974.5			1,488.2
Long-term debt	880.7			543.7
Accrued pension and postretirement benefits	153.9			153.2
Long-term deferred tax liability	161.1			162.4
Other liabilities	148.1			138.7
Total liabilities	2,318.3			2,486.2
Commitments and contingencies (Note 10)
Equity:
Preferred shares, par value 0.01; 5,000,000 shares authorized	—			—
Common shares, par value 1.00; 200,000,000 shares authorized, 72,440,983 shares issued	72.4			72.4
Capital surplus	376.8			373.8
Retained earnings	2,901.9			2,822.8
Accumulated other comprehensive loss	(487.8	)		(503.3	)
Treasury stock	(848.1	)		(864.3	)
Total shareholders’ equity	2,015.2			1,901.4
Noncontrolling interests	2.5			2.6
Total equity	2,017.7			1,904.0
Total liabilities and equity	4,336.0		$	4,390.2
Share data:
Common shares issued	72,440,983			72,426,389
Less: Common shares held in treasury	15,715,676			16,101,007
Common shares outstanding	56,725,307			56,325,382

All values are in US Dollars.

CRANE HOLDINGS, CO.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	****	Three Months Ended				****
	****	March 31,				****
(in millions)	****	2023	****	****	2022	****
Operating activities:
Net income attributable to common shareholders	$	105.7		$	105.0
Depreciation and amortization		28.6			28.6
Stock-based compensation expense		6.3			5.9
Defined benefit plans and postretirement credit		5.3			(2.7	)
Deferred income taxes		(0.1	)		(0.9	)
Cash used for operating working capital		(215.0	)		(183.7	)
Defined benefit plans and postretirement contributions		(1.8	)		(2.8	)
Environmental payments, net of reimbursements		(1.3	)		(1.3	)
Asbestos related payments, net of insurance recoveries		—			(7.5	)
Other		1.5			3.9
Total used for operating activities		(70.8	)		(55.5	)
Investing activities:
Proceeds from disposition of capital assets		0.1			—
Capital expenditures		(12.9	)		(13.0	)
Total used for investing activities		(12.8	)		(13.0	)
Financing activities:
Dividends paid		(26.6	)		(26.7	)
Reacquisition of shares on open market		—			(175.8	)
Stock options exercised, net of shares reacquired		12.8			0.7
Debt issuance costs		(4.0	)		—
Net borrowings from issuance of commercial paper with maturities of 90 days or less		—			104.0
Proceeds from term loan		350.0			—
Repayment of term loan		(400.0	)		—
Total used for financing activities		(67.8	)		(97.8	)
Effect of exchange rates on cash and cash equivalents		4.0			(5.1	)
Decrease in cash and cash equivalents		(147.4	)		(171.4	)
Cash and cash equivalents at beginning of period		657.6			478.6
Cash and cash equivalents at end of period	$	510.2		$	307.2

EX-99.2

Exhibit 99.2

UNAUDITED CONDENSED COMBINED<br>FINANCIAL STATEMENTS<br> <br><br> <br>Crane<br>NXT<br> <br>(A Business of Crane Holdings, Co.)<br><br><br>As of March 31, 2023 and<br> <br>for the<br>Three Months Ended March 31, 2023 and 2022

Unaudited Condensed Combined Financial Statements

As of March 31, 2023 and

for the Three Months Ended March 31, 2023 and 2022

Contents

EXPLANATORY NOTE	1
CONDENSED COMBINED STATEMENTS OF OPERATIONS	2
CONDENSED COMBINED STATEMENTS OF COMPREHENSIVE INCOME	3
CONDENSED COMBINED BALANCE SHEETS	4
CONDENSED COMBINED STATEMENTS OF CASH FLOWS	6
CONDENSED COMBINED STATEMENTS OF CHANGES IN NET INVESTMENT	8
NOTES TO UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS	9
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF<br>OPERATIONS	22

EXPLANATORY NOTE

On April 3, 2023, Crane Holdings, Co. was separated into two independent, publicly-traded companies, Crane NXT, Co. and Crane Company (the “Separation”). As part of the Separation, the Aerospace & Electronics, Process Flow Technologies and Engineered Materials businesses of Crane Holdings were spun off to Crane Company. Also as part of the Separation, Crane Holdings, Co. retained the Payment and Merchandising Technologies business and was renamed Crane NXT, Co. References herein to “Crane NXT,” the “Business,” “we,” “us” and “our” refer to the Crane NXT business (which, as of March 31, 2023, was a business of Crane Holdings). References to “Crane Holdings” refer to Crane Holdings, Co. and its subsidiaries prior to the consummation of the Separation on April 3, 2023.

CRANE NXT (A BUSINESS OF CRANE HOLDINGS, CO.)

CONDENSED COMBINED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

	****	Three Months Ended				****
	****	March 31,				****
(in millions)	****	2023	****	****	2022	****
Net income attributable to common shareholders	$	43.7		$	49.5
Components of other comprehensive income (loss), net of tax
Currency translation adjustment		4.9			(16.1	)
Changes in pension and postretirement plan assets<br>and benefit obligation, net of tax		(0.5	)		(0.2	)
Other comprehensive income (loss), net of<br>tax		4.4			(16.3	)
Comprehensive income attributable to common<br>shareholders	$	48.1		$	33.2

See Notes to Unaudited Condensed Combined Financial Statements.

CRANE NXT (A BUSINESS OF CRANE HOLDINGS, CO.)

CONDENSED COMBINED BALANCE SHEETS

(UNAUDITED)

(in millions)	March 31,<br><br><br>2023	****	December 31,<br> <br>2022
Assets
Current assets:
Cash and cash equivalents	218.2	$	230.7
Accounts receivable, net of allowance for credit losses of 10.1 as of March 31, 2023 and 6.1<br>as of December 31, 2022	185.3		205.1
Inventories, net:
Finished goods	38.6		26.2
Finished parts and subassemblies	24.3		23.0
Work in process	8.7		12.7
Raw materials	87.1		83.7
Inventories, net	158.7		145.6
Other current assets	47.1		41.9
Total current assets	609.3		623.3
Property, plant and equipment:
Cost	528.8		521.5
Less: accumulated depreciation	270.9		259.9
Property, plant and equipment, net	257.9		261.6
Long-term deferred tax assets	6.2		6.3
Other assets	59.4		56.7
Intangible assets, net	335.9		344.9
Goodwill	837.8		836.6
Total assets	2,106.5	$	2,129.4

All values are in US Dollars.

See Notes to Unaudited Condensed Combined Financial Statements.

CRANE NXT (A BUSINESS OF CRANE HOLDINGS, CO.)

CONDENSED COMBINED BALANCE SHEETS

(UNAUDITED)

(in millions)	****	March 31,<br><br><br>2023	** <br> <br>**	****	December 31,2022	****
Liabilities and Crane net investment
Current liabilities:
Short-term borrowings	$	308.5		$	299.7
Accounts payable		96.0			109.6
Accrued liabilities		180.3			204.2
U.S. and foreign taxes on income		24.4			17.9
Total current liabilities		609.2			631.4
Long-term debt		882.0			545.1
Accrued pension and postretirement benefits		20.1			21.1
Long-term deferred tax liability		112.4			109.5
Other liabilities		41.7			38.5
Total liabilities		1,665.4			1,345.6
Commitments and contingencies (Note 11)
Crane net investment:
Crane net investment		568.2			915.3
Accumulated other comprehensive loss		(127.1	)		(131.5	)
Total Crane net investment		441.1			783.8
Total liabilities and Crane net<br>investment	$	2,106.5		$	2,129.4

See Notes to Unaudited Condensed Combined Financial Statements.

CRANE NXT (A BUSINESS OF CRANE HOLDINGS, CO.)

CONDENSED COMBINED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	****	Three Months Ended				****
	****	March 31,				****
(in millions)	****	2023	****	****	2022	****
Operating activities:
Net income attributable to common shareholders	$	43.7		$	49.5
Adjustments to reconcile net income to net cash flows provided by operating<br>activities:
Depreciation and amortization		19.0			19.9
Stock-based compensation expense		2.3			2.1
Defined benefit plans and postretirement credit		(0.2	)		—
Deferred income taxes		3.1			4.0
Cash used for operating working capital		(28.7	)		(46.7	)
Other		(3.7	)		1.0
Total provided by operating activities	$	35.5		$	29.8
Investing activities:
Capital expenditures		(4.0	)		(2.5	)
Total used for investing activities	$	(4.0	)	$	(2.5	)
Financing activities:
Debt issuance costs	$	(4.0	)	$	—
Proceeds from term loan		350.0			—
Net transfers to Crane		(392.6	)		(22.9	)
Total used for financing activities	$	(46.6	)	$	(22.9	)
Effect of exchange rates on cash and cash equivalents	$	2.6		$	(2.3	)
(Decrease) increase in cash and cash equivalents		(12.5	)		2.1
Cash and cash equivalents at beginning of<br>period		230.7			101.2
Cash and cash equivalents at end of<br>period	$	218.2		$	103.3

See Notes to Unaudited Condensed Combined Financial Statements.

CRANE NXT (A BUSINESS OF CRANE HOLDINGS, CO.)

CONDENSED COMBINED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	****	Three Months Ended				****
	****	March 31,				****
(in millions)	****	2023	****	****	2022	****
Detail of cash provided by (used for) operating working capital:
Accounts receivable	$	21.0		$	6.7
Inventories		(12.2	)		(1.3	)
Other current assets		(4.7	)		(6.8	)
Accounts payable		(13.9	)		(14.6	)
Accrued liabilities		(26.0	)		(37.4	)
U.S. and foreign taxes on income		7.1			6.7
Total	$	(28.7	)	$	(46.7	)
Supplemental disclosure of cash flow information:
Interest paid	$	7.4		$	7.4
Income taxes paid	$	6.1		$	7.6

See Notes to Unaudited Condensed Combined Financial Statements.

CRANE NXT (A BUSINESS OF CRANE HOLDINGS, CO.)

CONDENSED COMBINED STATEMENTS OF CHANGES IN NET INVESTMENT

(UNAUDITED)

(in millions)		Crane net<br> investment			Accumulated<br>Other<br> Comprehensive <br><br><br>Loss			Total Crane net <br>investment
BALANCE DECEMBER 31, 2022	$	915.3		$	(131.5	)	$	783.8
Net income attributable to common shareholders		43.7			—			43.7
Stock-based compensation expense		2.3			—			2.3
Changes in pension and postretirement plan assets and benefit obligation, net<br>of tax		—			(0.5	)		(0.5	)
Currency translation adjustment		—			4.9			4.9
Net transfers to Crane		(393.1	)		—			(393.1	)
BALANCE MARCH 31, 2023	$	568.2		$	(127.1	)	$	441.1
(in millions)		Crane net<br> investment			Accumulated<br>Other<br><br><br>Comprehensive<br><br><br>Loss			Total Crane net <br>investment
---	---	---	---	---	---	---	---	---	---
BALANCE DECEMBER 31, 2021	$	836.1		$	(72.3	)	$	763.8
Net income attributable to common shareholders		49.5			—			49.5
Stock-based compensation expense		2.1			—			2.1
Changes in pension and postretirement plan assets and benefit obligation, net<br>of tax		—			(0.2	)		(0.2	)
Currency translation adjustment		—			(16.1	)		(16.1	)
Net transfers to Crane		(22.9	)		—			(22.9	)
BALANCE MARCH 31, 2022	$	864.8		$	(88.6	)	$	776.2

See Notes to Unaudited Condensed Combined Financial Statements.

NOTES TO THE UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS

Note 1 - Basis of Presentation

The accompanying Unaudited Condensed Combined Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial reporting and, therefore, reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. All such adjustments are of a normal recurring nature. These Unaudited Condensed Combined Financial Statements should be read in conjunction with the Crane NXT (A Business of Crane Holdings, Co.) Combined Financial Statements and Notes to Combined Financial Statements for the year ended December 31, 2022 previously filed on Form 8-K.

On April 3, 2023, Crane Holdings, Co. was separated into two independent, publicly-traded companies, Crane NXT, Co. and Crane Company (the “Separation”). As part of the Separation, the Aerospace & Electronics, Process Flow Technologies and Engineered Materials businesses of Crane Holdings were spun off to Crane Company. Also as part of the Separation, Crane Holdings, Co. retained the Payment and Merchandising Technologies business and was renamed Crane NXT, Co. References herein to “Crane NXT,” the “Business,” “we,” “us” and “our” refer to the Crane NXT business (which, as of March 31, 2023, was a business of Crane Holdings, Co.). References to “Crane Holdings” refer to Crane Holdings, Co. and its subsidiaries prior to the consummation of the Separation on April 3, 2023.

Crane NXT is a leading provider of trusted technology solutions to secure, detect, and authenticate our customers’ most valuable assets. We are comprised of two reporting segments: Crane Payment Innovations (“CPI”) and Crane Currency. Our primary end markets include governments and a wide range of consumer related end markets including retail and gaming. See Note 3, “Segment Information” for the relative size of these segments in relation to the total company (both net sales and total assets).

The Unaudited Condensed Combined Statements of Operations include all revenues and costs directly attributable to the Business, including costs for facilities, functions and services used by the Business. Costs for certain functions and services performed by centralized Crane Holdings organizations are directly charged to the Business based on specific identification when possible or reasonable allocation methods such as net sales, headcount, usage or other allocation methods. The results of operations include allocations of costs for administrative functions and services performed on behalf of the Business by centralized groups within Crane Holdings (see Note 2, “Related Parties” for a description of the allocation methodologies). All charges and allocations for facilities, functions and services performed by Crane Holdings have been deemed settled in cash by the Business to Crane Holdings in the period in which the cost was recorded in the Unaudited Condensed Combined Statements of Operations. Current and deferred income taxes have been determined based on the stand-alone results of the Business. However, because the Business filed group tax returns as part of Crane Holdings in certain jurisdictions, the Business’ actual tax balances may differ from that reported. The Business’ portion of income taxes for certain jurisdictions is deemed to have been settled in the period the related tax expense was recorded.

Crane Holdings uses a centralized approach to cash management and financing its operations. Accordingly, none of the cash of Crane Holdings has been allocated to the Business in the Combined Financial Statements. However, cash balances primarily associated with certain Crane NXT foreign entities that did not participate in Crane Holdings’ cash management program have been included in the Combined Financial Statements. Transactions between Crane Holdings and the Business are deemed to have been settled immediately through “Crane net investment.” The net effect of the deemed settled transactions is reflected in the Unaudited Condensed Combined Statements of Cash Flows as “Net transfers to Crane” within financing activities and in the Unaudited Condensed Combined Balance Sheets as “Crane net investment.” Other transactions, which have historically been cash-settled, are reflected in the Unaudited Condensed Combined Balance Sheets within “Accounts receivable, net” and “Accounts payable.” The net effect of the deemed settled transactions is reflected in the Unaudited Condensed Combined Statements of Cash Flows as “Net transfers to Crane” within financing activities and in the Unaudited Condensed Combined Balance Sheets as “Crane net investment.”

All intracompany accounts and transactions within the Business have been eliminated in the preparation of the Unaudited Condensed Combined Financial Statements. The Unaudited Condensed Combined Financial Statements of the Business include assets and liabilities that have been determined to be specifically identifiable or otherwise attributable to the Business.

NOTES TO THE UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS

All allocations and estimates in the Unaudited Condensed Combined Financial Statements are based on assumptions that management believes are reasonable. However, the Unaudited Condensed Combined Financial Statements included herein may not be indicative of the financial position, results of operations and cash flows of the Business in the future, or if the Business had been a separate, stand-alone entity during the periods presented.

Due to rounding, numbers presented throughout this report may not add up precisely to totals we provide, and percentages may not precisely reflect the absolute figures.

Separation

On April 3, 2023, Crane Holdings, Co. completed the Separation through a pro-rata distribution (the “Distribution”) of all of the issued and outstanding common stock of Crane Company to the stockholders of Crane Holdings, Co., which on April 3, 2023 was renamed “Crane NXT, Co.” The Distribution was effective at 5:00 p.m., Eastern Time, on April 3, 2023. As a result of the Distribution, Crane NXT, Co. and Crane Company each became independent public companies and Crane NXT, Co. common stock is listed under the symbol “CXT” on the New York Stock Exchange. Due to Crane Company’s larger operations, greater tangible assets, greater fair value and greater net sales, in each case, relative to Crane NXT, Co., among other factors, Crane Company will be treated as the “accounting spinnor” and therefore will be the “accounting successor” to Crane Holdings for accounting purposes, notwithstanding the legal form of the Separation. Therefore, following the Separation, Crane NXT, Co.’s historical financial statements are comprised solely of combined carve-out financial statements representing only those operations, assets, liabilities and equity of Crane NXT, Co., on a stand-alone basis derived from the consolidated financial statements and accounting records of Crane Holdings.

In connection with the Separation, Crane Holdings, Co., which on April 3, 2023 was renamed “Crane NXT, Co.”, entered into a new $350 million, 3-year term loan facility, and, on April 3, 2023, prior to the Separation, Crane Company paid a one-time cash dividend in the amount of $275 million to Crane Holdings, Co. See Note 12 – Financing for additional details.

Recent Accounting Pronouncements

The Business considered the applicability and impact of all Accounting Standards Updates issued by the Financial Accounting Standards Board (FASB) and determined them to be either not applicable or are not expected to have a material impact on the Business’s Unaudited Condensed Combined Statements of Operations, Balance Sheets and Cash Flows.

Note 2 - Related Parties

Historically, the Business has been managed and operated in the normal course of business with other affiliates of Crane Holdings. Accordingly, certain shared costs have been allocated to the Business and reflected as expenses in the Unaudited Condensed Combined Financial Statements.

Allocated Centralized Costs. The Unaudited Condensed Combined Financial Statements have been prepared on a stand-alone basis and are derived from the consolidated financial statements and accounting records of Crane Holdings.

Crane Holdings incurred corporate costs for services provided to the Business as well as other Crane Holdings businesses. These services include treasury, tax, accounting, human resources, audit, legal, purchasing, information technology and other such services. The costs associated with these services generally include all payroll and benefit costs, as well as overhead costs related to the support functions. Crane Holdings also allocated costs associated with corporate insurance coverage and medical, pension, post-retirement and other health plan costs for employees participating in Crane Holdings sponsored plans. Allocations are based on several utilization measures including headcount, proportionate usage and relative net sales. All such amounts have been deemed to have been incurred and settled by the Business in the period in which the costs were recorded.

The allocated functional service expenses and general corporate expenses for the three months ended March 31, 2023 and 2022 were $13.5 million and $7.3 million, respectively, and are included in “Selling, general and administrative” in the Unaudited Condensed Combined Statements of Operations.

NOTES TO THE UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS

In the opinion of management of Crane Holdings and the Business, the expense and cost allocations have been determined on a basis considered to be a reasonable reflection of the utilization of services provided or the benefit received by the Business during 2023 and 2022. The amounts that would have been, or will be incurred, on a stand-alone basis could differ from the amounts allocated due to economies of scale, difference in management judgment, a requirement for more or fewer employees or other factors. Management does not believe, however, that it is practicable to estimate what these expenses would have been had the Business operated as an independent entity, including any expenses associated with obtaining any of these services from unaffiliated entities. In addition, the future results of operations, financial position and cash flows could differ materially from the historical results presented herein.

Cash Management and Financing. The Business participated in Crane Holdings’ centralized cash management and daily cash sweeps. Disbursements are made through centralized accounts payable systems which were operated by Crane Holdings. Cash receipts are transferred to centralized accounts, which were also maintained by Crane Holdings. As cash is received and disbursed by Crane Holdings, it is accounted for by the Business through “Crane net investment.” Historically, Crane Holdings has centrally managed and swept cash for most domestic and certain European entities. However, certain legal entities do not participate in Crane Holdings’ centralized cash management program for a variety of reasons. As such, the Business’ cash that is not included in the centralized cash management and financing programs is classified as “Cash and cash equivalents” on the Unaudited Condensed Combined Balance Sheets of Crane NXT.

Accounts Receivable and Payable. Certain related party transactions between the Business and Crane Holdings have been included within “Crane net investment” in the Unaudited Condensed Combined Balance Sheets in the historical periods presented when the related party transactions are not settled in cash. “Crane net investment” includes related party loans receivable due from Crane Holdings and its affiliates of $0.0 million and $27.2 million as of March 31, 2023 and December 31, 2022, respectively. “Crane net investment” includes related party loans payable due to Crane Holdings and its affiliates of $242.9 million and $232.1 million as of March 31, 2023 and December 31, 2022, respectively. For the three months ended March 31, 2023 and 2022, we recorded related party interest expense related to the loan activity with Crane Holdings and its affiliates of $2.5 million and $3.7 million, respectively, which is included in the Business’ results as “Related party interest expense” in the Unaudited Condensed Combined Statements of Operations. The total effect of the settlement of these related party transactions is reflected with “Net transfers to Crane” as a financing activity in the Unaudited Condensed Combined Statements of Cash Flows.

Additionally, certain transactions between the Business and other Crane Holdings affiliates are cash-settled on a current basis and, therefore, are reflected in the Unaudited Condensed Combined Balance Sheets. Accounts receivable, net includes $0.1 million and $0.1 million as of March 31, 2023 and December 31, 2022, respectively, and Accounts payable includes $1.2 million and $1.7 million as of March 31, 2023 and December 31, 2022, respectively, related to such transactions.

Note 3 - SegmentResults

In accordance with ASC Topic 280, “Segment Reporting,” for purposes of segment performance measurement, we do not allocate to the business segments items that are of a non-operating nature; or corporate organizational and functional expenses of a governance nature.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies within the Crane NXT (A Business of Crane Holdings, Co.) Combined Financial Statements and Notes to the Combined Financial Statements for the year ended December 31, 2022.

Our segments are reported on the same basis used internally for evaluating performance and for allocating resources. We have two reporting segments: Crane Payment Innovations and Crane Currency.

A brief description of each of our segments are as follows:

NOTES TO THE UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS

Crane Payment Innovations

CPI provides electronic equipment and associated software leveraging extensive and proprietary core capabilities with various detection and sensing technologies for applications including verification and authentication of payment transactions. CPI also provides advanced automation solutions, and processing systems, field service solutions, and remote diagnostics and productivity software solutions. Key research and development and manufacturing facilities are located in the United States, the United Kingdom, Mexico, Japan, Switzerland and Germany, with additional sales offices across the world.

Crane Currency

Crane Currency provides advanced security solutions based on proprietary technology for securing physical products, including banknotes, consumer goods and industrial products. Facilities are located in the United States, Sweden and Malta.

Financial information by reportable segment is set forth below.

	****	Three Months Ended				****
	****	March 31,				****
(in millions)	****	2023	****	****	2022	****
Net sales:
Crane Payment Innovations	$	223.8		$	211.0
Crane Currency		105.3			121.6
Total	$	329.1		$	332.6
Operating profit (loss):
Crane Payment Innovations	$	61.8		$	49.0
Crane Currency		17.6			35.2
Corporate		(13.5	)		(7.3	)
Total	$	65.9		$	76.9
Interest income		0.2			—
Interest expense		(10.4	)		(10.5	)
Related party interest expense		(2.5	)		(3.7	)
Miscellaneous income, net		1.4			0.8
Income before income taxes	$	54.6		$	63.5
(in millions)	****	March 31, 2023	****	December 31,2022
---	---	---	---	---
Assets:
Crane Payment Innovations	$	1,313.2	$	1,266.1
Crane Currency		792.5		863.3
Corporate		0.8		—
Total	$	2,106.5	$	2,129.4
(in millions)	****	March 31,2023	****	December 31,2022
---	---	---	---	---
Goodwill:
Crane Payment Innovations	$	623.6	$	622.4
Crane Currency		214.2		214.2
Total	$	837.8	$	836.6

NOTES TO THE UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS

Note 4 - Revenue

Disaggregation of Revenues

The following table presents net sales disaggregated by product line for each segment:

	****	Three Months Ended
	****	March 31,
(in millions)	****	2023	****	2022
Crane Payment Innovations
Products	$	192.7	$	181.7
Services		31.1		29.3
Total Crane Payment Innovations	$	223.8	$	211.0
Crane Currency
Banknotes and Security Products	$	105.3	$	121.6
Total Crane Currency	$	105.3	$	121.6
Net sales	$	329.1	$	332.6

Remaining Performance Obligations

The transaction price allocated to remaining performance obligations represents the transaction price of firm orders which have not yet been fulfilled. As of March 31, 2023, our performance obligations were $556.0 million. We expect to recognize approximately 92% of our remaining performance obligations as revenue in 2023 and the remainder in 2024.

Contract Assets and Contract Liabilities

Contract assets represent unbilled amounts that typically arise from contracts for customized products or contracts for products sold directly to the U.S. government or indirectly to the U.S. government through subcontracts, where revenue recognized using the cost-to-cost method exceeds the amount billed to the customer. Contract assets are assessed for impairment and recorded at their net realizable value. Contract liabilities represent advance payments from customers. Revenue related to contract liabilities is recognized when control is transferred to the customer. We report contract assets, which are included within “Other current assets” in our Unaudited Condensed Combined Balance Sheets, and contract liabilities, which are included within “Accrued liabilities” on our Unaudited Condensed Combined Balance Sheets, on a contract-by-contract net basis at the end of each reporting period. Net contract assets and contract liabilities consisted of the following:

(in millions)	****	March 31, 2023	****	December 31, 2022
Contract assets	$	34.4	$	31.8
Contract liabilities	$	99.3	$	93.6

We recognized revenue of $27.3 million during the three-month period ended March 31, 2023, related to contract liabilities as of December 31, 2022.

NOTES TO THE UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS

Note 5 - Earnings Per Share

The basic earnings per share calculations are based on the weighted average number of Crane Holdings, Co. common shares outstanding during the period. For the three months ended March 31, 2023 and March 31, 2022, the shares presented are those of Crane Holdings, Co. and are treated as issued and outstanding from January 1, 2023 and 2022, respectively, for purposes of calculating historical earnings per share of Crane NXT. Potentially dilutive securities include outstanding stock options, restricted share units, deferred stock units and performance-based restricted share units. The effect of potentially dilutive securities is reflected in diluted earnings per common share by application of the treasury method. Diluted earnings per share gives effect to all potentially dilutive common shares outstanding during the period.

	****	Three Months Ended
	****	March 31,
(in millions, except per share data)	****	2023	****	2022
Net income attributable to common<br>shareholders	$	43.7	$	49.5
Average basic shares outstanding		56.5		57.1
Effect of dilutive share-based awards		0.8		0.8
Average diluted shares outstanding		57.3		57.9
Earnings per basic share:	$	0.77	$	0.87
Earnings per diluted share:	$	0.76	$	0.85

Stock options, restricted share units, deferred stock units and performance-based restricted share units that were excluded from the calculation of diluted earnings per share because their effect is anti-dilutive was 0.4 million and 0.3 million for the three months ended March 31, 2023, and 2022, respectively.

NOTES TO THE UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS

Note 6 - Changes in Accumulated Other Comprehensive Loss

The table below provides the accumulated balances for each classification of accumulated other comprehensive loss, as reflected on our Unaudited Condensed Combined Balance Sheets.

(in millions)	****	Defined BenefitPension and Postretirement Items	****	****	CurrencyTranslation Adjustment	****	****	Total^(a)^	****
Balance as of December 31, 2022	$	9.0		$	(140.5	)	$	(131.5	)
Other comprehensive income before reclassifications		—			4.9			4.9
Amounts reclassified from accumulated other<br>comprehensive loss		(0.5	)		—			(0.5	)
Net period other comprehensive (loss)<br>income		(0.5	)		4.9			4.4
Balance as of March 31, 2023	$	8.5		$	(135.6	)	$	(127.1	)
^(a)^	Net of tax detriment $2.0 million and $2.1 million as of March 31, 2023 and December 31, 2022,<br>respectively.
---	---

The table below illustrates the amounts reclassified out of each component of accumulated other comprehensive loss for the three month periods ended March 31, 2023 and 2022. Amortization of pension and postretirement components has been recorded within “Miscellaneous income, net” on our Unaudited Condensed Combined Statements of Operations.

	****	Three Months Ended March 31,				****
(in millions)	****	2023	****	****	2022	****
Amortization of pension items:
Prior service costs	$	(0.2	)	$	(0.2	)
Net loss		—			0.2
Amortization of postretirement items:
Prior service costs		(0.3	)		(0.3	)
Net gain		(0.1	)		—
Total before tax	$	(0.6	)	$	(0.3	)
Tax impact		(0.1	)		(0.1	)
Total reclassifications for the period	$	(0.5	)	$	(0.2	)

Note 7 - Defined Benefit and Postretirement Benefits

The Business sponsors numerous single-employer international employee benefit plans. In addition, certain of our employees participate in employee benefit plans sponsored by Crane Holdings which include participants of other Crane Holdings businesses (the “Shared Plans”). We account for our participation in the Shared Plans as multiple employer benefit plans.

The components of net periodic benefit for the three months ended March 31, 2023 and 2022 are as follows:

	****	Pension				****	****	Postretirement				****
(in millions)	****	2023	****	****	2022	****	****	2023	****	****	2022	****
Service cost	$	0.5		$	0.6		$	—		$	0.1
Interest cost		0.5			0.2			0.2			0.2
Expected return on plan assets		(0.8	)		(0.8	)		—			—
Amortization of prior service cost		(0.2	)		(0.2	)		(0.3	)		(0.3	)
Amortization of net loss (gain)		—			0.2			(0.1	)		—
Net periodic benefit	$	—		$	—		$	(0.2	)	$	—

NOTES TO THE UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS

The components of net periodic benefit, other than the service cost component, are included in “Miscellaneous (expense) income, net” in our Unaudited Condensed Combined Statements of Operations. Service cost is recorded within “Cost of sales” and “Selling, general and administrative” in our Unaudited Condensed Combined Statements of Operations.

We expect to contribute the following to our pension and postretirement plans:

(in millions)	****	Pension	****	Postretirement
Expected contributions in 2023	$	1.9	$	1.8
Amounts contributed during the three months ended March 31,<br>2023	$	0.1	$	1.5

Note 8 - Income Taxes

Effective TaxRates

Our quarterly provision for income taxes is measured using an annual effective tax rate, adjusted for discrete items within the periods presented.

Our effective tax rates are as follows:

	Three Months Ended March 31,
	2023	2022
Effective Tax Rate	20.0%	22.1%

Our effective tax rate for the three months ended March 31, 2023 is lower than the prior year’s comparable period primarily due utilization of foreign tax credits in the current year.

Our effective tax rate for the three months ended March 31, 2023 is lower than the statutory U.S. federal tax rate of 21% primarily due to utilization of foreign tax credits.

The Business conducts business globally and, as a result, files income tax returns in U.S. federal and various state and foreign jurisdictions. In certain jurisdictions, the Business’ operations are included in the combined tax returns with Crane Holdings.

Unrecognized Tax Benefits

During the three months ended March 31, 2023, our gross unrecognized tax benefits, excluding interest and penalties, increased by $0.1 million, primarily due to increases in tax positions taken in the current period, partially offset by decreases in tax positions taken in the prior period. During the three months ended March 31, 2023, the total amount of unrecognized tax benefits that, if recognized, would affect our effective tax rate increased by $0.2 million. The difference between these amounts relates to (1) offsetting tax effects from other tax jurisdictions, and (2) interest expense, net of deferred taxes.

During the three months ended March 31, 2023, we recognized $0.1 million of interest expense related to unrecognized tax benefits in our Unaudited Condensed Combined Statement of Operations. As of March 31, 2023, and December 31, 2022, the total amount of accrued interest and penalty expense related to unrecognized tax benefits recorded in our Unaudited Condensed Combined Balance Sheets was $1.3 million and $1.2 million, respectively.

During the next twelve months, it is reasonably possible that our unrecognized tax benefits may decrease by $5.0 million due to expiration of statutes of limitations and settlements with tax authorities. However, if the ultimate resolution of income tax examinations results in amounts that differ from this estimate, we will record additional income tax expense or benefit in the period in which such matters are effectively settled.

NOTES TO THE UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS

Note 9 - Goodwill and Intangible Assets

Changes to goodwill are as follows:

(in millions)	****	Crane Payment<br> <br><br><br><br>Innovations	****	Crane Currency	****	Total
Balance as of December 31, 2022	$	622.4	$	214.2	$	836.6
Currency translation		1.2		—		1.2
Balance as of March 31, 2023	$	623.6	$	214.2	$	837.8

As of March 31, 2023, we had $335.9 million of net intangible assets, of which $45.5 million were intangibles with indefinite useful lives. As of December 31, 2022, we had $344.9 million of net intangible assets, of which $45.5 million were intangibles with indefinite useful lives.

Changes to intangible assets are as follows:

(in millions)	****	Three Months Ended<br> <br><br><br><br>March 31, 2023	<br><br><br><br> <br>	****	Year Ended<br><br><br><br> <br>December 31, 2022	<br><br><br><br> <br>
Balance at beginning of period, net of accumulated amortization	$	344.9		$	388.5
Amortization expense		(9.0	)		(36.0	)
Currency translation and other		—			(7.6	)
Balance at end of period, net of accumulated amortization	$	335.9		$	344.9

A summary of intangible assets follows:

		****	March 31, 2023					****	December 31, 2022
(in millions)	Weighted Average<br><br><br>Amortization Period ofFinite Lived Assets<br><br><br>(in years)	****	Gross<br> <br>Asset	****	Accumulated<br><br><br>Amortization	****	Net	****	Gross<br> <br>Asset	****	Accumulated<br> <br>Amortization	****	Net
Intellectual property rights	10.1	$	62.1	$	14.3	$	47.8	$	62.0	$	14.0	$	48.0
Customer relationships and backlog	18.8		503.4		248.9		254.5		502.9		242.0		260.9
Other	10.0		99.1		65.5		33.6		98.7		62.7		36.0
Total	18.0	$	664.6	$	328.7	$	335.9	$	663.6	$	318.7	$	344.9

Future amortization expense associated with intangible assets is expected to be:

(in millions)
Remainder of 2023	$	27.3
2024		35.9
2025		30.5
2026		30.3
2027		29.6
2028 and after		136.8

NOTES TO THE UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS

Note 10 - Accrued Liabilities

Accrued liabilities consist of:

(in millions)	****	March 31,<br><br><br>2023	****	December 31,<br><br><br>2022
Contract liabilities	$	99.3	$	93.6
Employee related expenses		28.8		56.3
Current lease liabilities		6.5		7.4
Warranty		6.0		4.4
Other		39.7		42.5
Total	$	180.3	$	204.2

Note 11 - Commitments and Contingencies

We regularly review the status of lawsuits, claims and proceedings that have been or may be asserted against us relating to the conduct of our business, including those pertaining to product liability, patent infringement, commercial, employment, employee benefits, environmental and stockholder matters. We record a provision for a liability for such matters when it is considered probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions, if any, are reviewed quarterly and adjusted as additional information becomes available. If either or both of the criteria are not met, we assess whether there is at least a reasonable possibility that a loss, or additional losses, may have been incurred. If there is a reasonable possibility that a loss or additional loss may have been incurred for such matters, we disclose the estimate of the amount of loss or range of loss, disclose that the amount is immaterial, or disclose that an estimate of loss cannot be made, as applicable. We believe that as of March 31, 2023, there was no reasonable possibility that a material loss, or any additional material losses, may have been incurred for such matters.

Note 12 - Financing

Our debt, which was centrally managed as part of Crane Holdings’ centralized treasury function, as of March 31, 2023 and December 31, 2022 consisted of the following:

(in millions)	****	March 31,<br><br><br>2023	<br> <br>	****	December 31,<br><br><br>2022
Term Facility ^(a)^	$	8.7		$	—
4.45% notes due December 2023 ^(a)^		299.8			299.7
Total short-term borrowings	$	308.5		$	299.7
Term Facility ^(a)^	$	339.3		$	—
6.55% notes due November 2036 ^(a)^		198.6			198.6
4.20% notes due March 2048 ^(a)^		346.5			346.5
Other deferred financing costs associated with credit facilities		(2.4	)		—
Total long-term debt	$	882.0		$	545.1

(a) Debt discounts and debt issuance costs totaled $7.1 million and $5.6 million as of March 31, 2023 and December 31, 2022, respectively, and have been netted against the aggregate principal amounts of the related debt in the components of the debt table above.

4.45% notes due December 2023 - On March 3, 2023, Crane Holdings, Co. notified bondholders of its intent to redeem all of its outstanding $300 million aggregate principal amount of its 4.45% senior notes due 2023 on April 4, 2023. Crane NXT completed the redemption on April 4, 2023.

Credit Facilities – On March 17, 2023, Crane Holdings, Co. entered into a new senior secured credit agreement (the “Credit Agreement”), which provides for (i) a $500 million, 5-year revolving credit facility (the “Revolving Facility”) and (ii) a $350 million, 3-year term loan facility (the “Term Facility”), funding under the Revolving Facility and the Term Facility became available in connection with the Separation, upon the satisfaction of customary conditions of facilities of this type. On March 31, 2023, Crane Holdings, Co. borrowed the full amount of the Term Facility.

NOTES TO THE UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS

The Revolving Facility allows us to borrow, repay and re-borrow funds from time to time prior to the maturity of the Revolving Facility without any penalty or premium, subject to customary borrowing conditions for facilities of this type and the reimbursement of breakage costs. Borrowings under the Term Facility are prepayable without any premium or penalty, subject to customary reimbursement of breakage costs. Interest on loans advanced under the Credit Agreement accrues, at our option, at a rate per annum equal to (1) adjusted term SOFR plus a credit spread adjustment of 0.10% for the applicable interest period plus a margin ranging from 1.50% to 2.25% or (2) a base rate plus a margin ranging from 0.50% to 1.25%, in each case, with such margin determined based on the lower of the ratings of our senior, unsecured long-term debt (the “Ratings”) and our total net leverage ratio. We are required to pay a fee on undrawn commitments under the Revolving Facility at a rate per annum that ranges from 0.20% to 0.35%, based on the lower of the Ratings and our total net leverage ratio. The Credit Agreement contains customary affirmative and negative covenants for credit facilities of this type, including limitations on our and our subsidiaries with respect to indebtedness, liens, mergers, consolidations, liquidations and dissolutions, sales of all or substantially all assets, transactions with affiliates, investments, hedging arrangements and amendments to our organizational documents or to certain subordinated debt agreements. As of the last day of each fiscal quarter, our total net leverage ratio cannot exceed 3.50 to 1.00 (provided that, at our election, such maximum ratio may be increased to 4.00 to 1.00 for specified periods following our consummation of certain material acquisitions) and our minimum interest coverage ratio must be at least 3.00 to 1.00. The Credit Agreement also includes customary events of default, including failure to pay principal, interest or fees when due, failure to comply with covenants, any representation or warranty made by us or any of our material subsidiaries being false in any material respect, default under certain other material indebtedness, certain insolvency or receivership events affecting us and our material subsidiaries, certain ERISA events, material judgments and a change in control, in each case, subject to cure periods and thresholds where customary.

Note 13 - Fair Value Measurements

Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are to be considered from the perspective of a market participant that holds the asset or owes the liability. The standards also establish a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The standards describe three levels of inputs that may be used to measure fair value:

Level 1 : Quoted prices in active markets for identical or similar assets and liabilities.

Level 2 : Quoted prices for identical or similar assets and liabilities in markets that are not active or observable inputs other than quoted prices in active markets for identical or similar assets and liabilities. Level 2 assets and liabilities include over-the-counter derivatives, principally forward foreign exchange contracts, whose value is determined using pricing models with inputs that are generally based on published foreign exchange rates and exchange traded prices, adjusted for other specific inputs that are primarily observable in the market or can be derived principally from or corroborated by observable market data.

Level 3 : Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Valuation Technique

The carrying value of our financial assets and liabilities, including cash and cash equivalents, accounts receivable and accounts payable, approximate fair value, without being discounted, due to the short periods during which these amounts are outstanding.

NOTES TO THE UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS

We are exposed to certain risks related to our ongoing business operations, including market risks related to fluctuation in currency exchange. We use foreign exchange contracts to manage the risk of certain cross-currency business relationships to minimize the impact of currency exchange fluctuations on our earnings and cash flows. We do not hold or issue derivative financial instruments for trading or speculative purposes. Foreign exchange contracts not designated as hedging instruments had a notional value $85.7 million as of December 31, 2022. We had no such hedging instruments as of March 31, 2023. Our derivative assets and liabilities include foreign exchange contract derivatives that are measured at fair value using internal models based on observable market inputs such as forward rates and interest rates. Based on these inputs, the derivatives are classified within Level 2 of the valuation hierarchy. Such derivative receivable amounts are recorded within “Other current assets” on our Unaudited Condensed Combined Balance Sheets and were $5.8 million as of December 31, 2022. We had no such derivative receivables as of March 31, 2023.

Available-for-sale securities consist of rabbi trust investments that hold marketable securities for the benefit of participants in our Supplemental Executive Retirement Plan. These investments are measured at fair value using quoted market prices in an active market and are therefore classified within Level 1 of the valuation hierarchy. The fair value of available-for-sale securities was $0.4 million and $0.4 million as of March 31, 2023 and December 31, 2022, respectively. These investments are included in “Other assets” on our Unaudited Condensed Combined Balance Sheets.

Long-term debt rates currently available to us for debt with similar terms and remaining maturities are used to estimate the fair value for debt issues that are not quoted on an exchange. The estimated fair value of total debt, measured using Level 2 inputs, was $779.0 million and $753.1 million as of March 31, 2023 and December 31, 2022, respectively.

Note 14 - Restructuring

2022 Restructuring - In the fourth quarter of 2022, in response to economic uncertainty, we initiated modest workforce reductions in CPI of approximately 140 employees, or about 4% of our global workforce. We expect to substantially complete the program in the fourth quarter of 2023.

We did not incur any restructuring costs during the three months ended March 31, 2023 or March 31, 2022. We have incurred $6.2 million of cumulative restructuring costs, net through March 31, 2023, of which $5.7 million related to severance and $0.5 million related to other costs. We do not expect to incur additional costs to complete these actions.

The following table summarizes the accrual balances related to the 2022 Restructuring program:

(in millions)	****	2022 Restructuring	****
Severance:
Balance as of December 31, 2022<br>^(a)^	$	6.0
Utilization		(2.6	)
Balance as of March 31, 2023 ^(a)^	$	3.4
(a)	Included within Accrued Liabilities in the Unaudited Condensed Combined Balance Sheets.
---	---

Note 15 - Subsequent Events

The Business evaluated events and transactions occurring subsequent to March 31, 2023 through May 10, 2023, the date the Unaudited Condensed Combined Financial Statements were issued.

Dividend from Crane Company

Prior to the consummation of the Separation, the Board of Directors of Crane Company declared a one-time cash dividend in the amount of $275 million to Crane Holdings, Co., its sole stockholder at that time, and paid such dividend on April 3, 2023, prior to the consummation of the Separation.

NOTES TO THE UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS

The Separation and Distribution

On April 3, 2023, the Separation was completed.

In connection with the Separation, Crane Holdings, Co., which was renamed “Crane NXT, Co.” immediately following the separation, and Crane Company entered into various agreements to effect the Separation and provide a framework for their relationship after the Separation, including a separation and distribution agreement, a transition services agreement, an employee matters agreement, a tax matters agreement and an intellectual property matters agreement. These agreements provide for the allocation between Crane NXT, Co. and Crane Company of assets, employees, liabilities and obligations (including property and employee benefits and tax-related assets and liabilities) attributable to periods prior to, at, and after the consummation of the Separation and govern certain relationships between Crane NXT, Co. and Crane Company after the Separation.

On April 3, 2023, in connection with the Separation, Crane NXT received approximately $80 million of cash through a transfer from Crane Holdings.

4.45% notes dueDecember 2023

On April 4, 2023, Crane NXT redeemed all of its outstanding 4.45% senior notes due 2023, of which $300 million aggregate principal amount was outstanding upon redemption.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains information about Crane NXT, Co. (formerly known as Crane Holdings, Co), some of which includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements other than historical information or statements about our current condition. Investors can identify forward-looking statements by the use of terms such as “believes,” “contemplates,” “expects,” “may,” “could,” “should,” “would,” or “anticipates,” other similar phrases, or the negatives of these terms.

On April 3, 2023, Crane Holdings, Co. was separated into two independent, publicly-traded companies, Crane NXT, Co. and Crane Company (the “Separation”). As part of the Separation, the Aerospace & Electronics, Process Flow Technologies and Engineered Materials businesses of Crane Holdings were spun off to Crane Company. Also as part of the Separation, Crane Holdings, Co. retained the Payment and Merchandising Technologies business and was renamed Crane NXT, Co. References herein to “Crane NXT,” the “Business,” “we,” “us” and “our” refer to the Crane NXT business (which, as of March 31, 2023, was a business of Crane Holdings, Co.). References to “Crane Holdings” refer to Crane Holdings, Co. and its subsidiaries prior to the consummation of the Separation on April 3, 2023.

References to “core business” or “core sales” in this report include sales from acquired businesses starting from and after the first anniversary of the acquisition but exclude currency effects. Amounts in the following discussion are presented in millions, except employee, share and per share data, or unless otherwise stated.

We have based the forward-looking statements relating to our operations on our current expectations, estimates and projections about us and the markets we serve. We caution investors that these statements are not guarantees of future performance and involve risks and uncertainties. In addition, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. There are a number of other factors, including risks and uncertainties related to the ongoing effects of the COVID-19 pandemic, that could cause actual results or outcomes to differ materially from those expressed or implied in the forward-looking statements. Such factors also include, among others: changes in global economic conditions (including inflationary pressures) and geopolitical risks, including macroeconomic fluctuations that may harm our business, results of operations and stock price; the effects of the ongoing coronavirus pandemic on our business and the global and U.S. economies generally; information systems and technology networks failures and breaches in data security, 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 United States; 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; the ability and willingness of Crane NXT, Co. and Crane Company to meet and/or perform their obligations under any contractual arrangements entered into among the parties in connection with the Separation and any of their obligations to indemnify, defend and hold the other party harmless from and against various claims, litigation and liabilities; our ability to achieve some or all the benefits that we expect to achieve from the Separation; and other risks noted in reports that we file with the Securities and Exchange Commission, including the Crane Holdings, Co. (now known as Crane NXT, Co.) Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and subsequent reports and other documents filed with the Securities and Exchange Commission. We do not undertake any obligation to update or revise any forward-looking statements to reflect any future events or circumstances.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Recent Transactions

Separation

On April 3, 2023, Crane Holdings, Co. completed the Separation, as described in Note 1 - Basis of Presentation and Note 15 - Subsequent Events, in the accompanying Unaudited Condensed Combined Financial Statements above, through the Distribution of all of the issued and outstanding common stock of Crane Company to the stockholders of Crane Holdings, Co. Effective as of immediately following the consummation of the Separation on April 3, 2023, Crane Holdings, Co. was renamed “Crane NXT, Co.”

In connection with the Separation, Crane Holdings, Co. entered into the “Term Facility,” and, on April 3, 2023, Crane Company paid a one-time cash dividend in the amount of $275 million to Crane Holdings, Co. See Note 12, “Financing” for additional details. The proceeds of the dividend, along with cash on hand, was used to repay the $300 million of 4.45% notes due in December 2023.

As of April 4, 2023, Crane NXT held cash of approximately $270 million, reflecting an additional approximately $80 million of cash transferred from Crane Holdings, Co. as part of the separation, and total debt was $891 million.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results from Operations

The following information should be read in conjunction with our Condensed Combined Financial Statements and related notes. All comparisons below refer to the first quarter 2023 versus the first quarter 2022, unless otherwise specified.

	****	First Quarter				****	****	Favorable/(Unfavorable) Change
(dollars in millions)	****	2023	****	****	2022	****	****		%
Net sales	$	329.1		$	332.6		$	(3.5	(1.1)%
Cost of sales		174.4			179.1			4.7	2.6 %
as a percentage of sales		53.0	%		53.8	%
Selling, general and administrative		88.8			76.6			(12.2	(15.9)%
as a percentage of sales		27.0	%		23.0	%
Operating profit		65.9			76.9			(11.0	(14.3)%
Operating margin		20.0	%		23.1	%
Other income (expense):
Interest income		0.2			—			0.2	NM
Interest expense		(10.4	)		(10.5	)		0.1	1.0 %
Related party interest expense		(2.5	)		(3.7	)		1.2	32.4 %
Miscellaneous income, net		1.4			0.8			0.6	75.0 %
Total other expense		(11.3	)		(13.4	)		2.1	15.7 %
Income before income taxes		54.6			63.5			(8.9	(14.0)%
Provision for income taxes		10.9			14.0			3.1	22.1%
Net income attributable to common shareholders	$	43.7		$	49.5		$	(5.8	(11.7)%

All values are in US Dollars.

Sales decreased $3.5 million, or 1.1%, to $329.1 million in 2023. The year-over-year change in sales included:

•	an increase in core sales of $8.9 million, or 2.7%, driven primarily by higher pricing; and
•	unfavorable foreign currency translation of $12.4 million, or 3.7%.
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Cost of sales decreased by $4.7 million, or 2.6%, to $174.4 million in 2023, primarily reflecting lower volumes of $9.0 million, or 5.0%, strong productivity of $8.5 million, or 4.7%, and favorable foreign currency translation of $7.4 million, or 4.1%, partially offset by unfavorable mix of $14.2 million, or 7.9%, and an increase in material, labor and other manufacturing costs of $6.0 million, or 3.4%.

Selling, general and administrative expense increased by $12.2 million, or 15.9%, to $88.8 million in 2023, primarily due to higher administrative expenses of $13.2 million, or 17.2%, including $6.2 million, or 8.1%, of higher compensation and benefit costs, professional services and transaction costs predominantly related to the Separation, partially offset by favorable currency translation of $2.1 million, or 2.7%.

Operating profit decreased by $11.0 million, or 14.3%, to $65.9 million in 2023. The decrease primarily reflected an unfavorable mix of $14.2 million, or 18.5%, lower volumes of $12.0 million, or 15.6%, higher Separation related administrative expenses of $6.2 million, or 8.1%, and unfavorable foreign currency translation of $2.9 million, or 3.8%, partially offset by higher pricing net of inflation and productivity gains of $24.7 million, or 32.1%.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Comprehensive Income

	****	Three Months Ended				****
	****	March 31,				****
(in millions)	****	2023	****	****	2022	****
Net income	$	43.7		$	49.5
Components of other comprehensive income (loss), net of tax
Currency translation adjustment		4.9			(16.1	)
Changes in pension and postretirement plan assets and benefit<br>obligation, net of tax		(0.5	)		(0.2	)
Other comprehensive income (loss), net of tax		4.4			(16.3	)
Comprehensive income attributable to common shareholders	$	48.1		$	33.2

For the three months ended March 31, 2023, other comprehensive income was $4.4 million compared to the loss of $16.3 million in the same period of 2022. The $20.7 million increase was primarily driven by $21.0 million year-over-year favorable impact of foreign currency translation adjustments, primarily related to the euro, Japanese yen and Swedish krona.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Segment Results of Operations

Crane Payment Innovations

	****	First Quarter				****	****	Favorable/(Unfavorable) Change		****
(dollars in millions)	****	2023	****	****	2022	****	****		%	****
Net sales by product line:
Payment Acceptance and Dispensing Products	$	192.7		$	181.7		$	11.0	6.1	%
Services		31.1			29.3			1.8	6.1	%
Total net sales	$	223.8		$	211.0		$	12.8	6.1	%
Cost of sales	$	107.4		$	109.6		$	2.2	2.0	%
as a percentage of sales		48.0	%		51.9	%
Selling, general and administrative	$	54.6		$	52.4		$	(2.2	(4.2	)%
as a percentage of sales		24.4	%		24.8	%
Operating profit	$	61.8		$	49.0		$	12.8	26.1	%
Operating margin		27.6	%		23.2	%

All values are in US Dollars.

Sales increased $12.8 million, or 6.1%, to $223.8 million in 2023. The increase reflected higher core sales of $21.7 million, or 10.3%, partially offset by unfavorable foreign currency translation of $8.9 million, or 4.2%.

•

Sales of Payment Acceptance and Dispensing Products increased $11.0 million, or 6.1%, to $192.7 million in 2023, reflecting higher core sales of $19.9 million, or 11.0%, due to strong demand and higher pricing year over year, partially offset by unfavorable foreign currency translation of $8.9 million, or 4.9%, primarily due to the British pound and Japanese yen weakening against the U.S. dollar. The core sales increase primarily reflected higher component sales.

•

Service revenue increased by $1.8 million, or 6.1%, to $31.1 million in 2023, primarily driven by a higher volume of service contract sales.

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Cost of sales decreased by $2.2 million, or 2.0%, to $107.4 million in 2023, primarily reflecting lower volumes and strong productivity of $7.8 million, or 7.1%, favorable foreign currency translation of $5.1 million, or 4.7%, partially offset by an increase in material, labor and other manufacturing costs of $7.6 million, or 6.9%, and unfavorable mix of $3.1 million, or 2.8%.

Selling, general and administrative expense increased by $2.2 million, or 4.2%, to $54.6 million in 2023, primarily reflecting an increase of $5.3 million, or 10.1%, in administrative and sales expenses, partially offset by restructuring savings of $1.7 million, or 3.2%, and favorable foreign currency translation of $1.5 million, or 2.9%.

Operating profit increased by $12.8 million, or 26.1%, to $61.8 million in 2023, primarily due to higher pricing net of inflation, and productivity gains, of $19.6 million, or 40.0%, offset by unfavorable mix of $3.1 million, or 6.3%, and unfavorable foreign currency translation of $2.3 million, or 4.7%.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Crane Currency

	****	First Quarter				****	****	Favorable/(Unfavorable) Change
(dollars in millions)	****	2023	****	****	2022	****	****		%
Net sales		105.3			121.6			(16.3	(13.4)%
Cost of sales	$	67.0		$	69.5		$	2.5	3.6 %
as a percentage of sales		63.6	%		57.2	%
Selling, general and administrative	$	20.7		$	16.9		$	(3.8	(22.5)%
as a percentage of sales		19.7	%		13.9	%
Operating profit	$	17.6		$	35.2		$	(17.6	(50.0)%
Operating margin		16.7	%		28.9	%

All values are in US Dollars.

Banknote and security product sales decreased $16.3 million, or 13.4%, to $105.3 million in 2023. The decrease primarily related to lower core sales of $12.8 million, or 10.5%, and unfavorable foreign currency translation of $3.5 million, or 2.9%, as the euro weakened against the U.S. dollar. The core sales decrease primarily reflected lower sales to the U.S. Government, following a notably strong first quarter last year.

Cost of sales decreased by $2.5 million, or 3.6%, to $67.0 million in 2023. Relative to the decline in sales, the impact of lower volumes and productivity gains were more than offset by unfavorable mix and inflation.

Selling, general and administrative expense increased by $3.8 million, or 22.5%, to $20.7 million in 2023, primarily reflecting an increase of $3.0 million, or 17.8%, in administrative expenses.

Operating profit decreased by $17.6 million, or 50.0%, to $17.6 million in 2023. The decrease primarily reflected lower volumes of $10.9 million, or 31.0%, and unfavorable mix of $11.1 million, or 31.5%, both driven by anticipated lower sales to the U.S. Government, partially offset by productivity gains of $5.5 million, or 15.6%.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Liquidity and Capital Resources

	****	Three Months Ended				****
	****	March 31,				****
(in millions)	****	2023	****	****	2022	****
Net cash provided by (used for) :
Operating activities	$	35.5		$	29.8
Investing activities		(4.0	)		(2.5	)
Financing activities		(46.6	)		(22.9	)
Effect of exchange rates on cash and cash equivalents		2.6			(2.3	)
(Decrease) increase in cash and cash equivalents	$	(12.5	)	$	2.1

Our operating philosophy is to deploy cash provided from operating activities, when appropriate, to provide value to shareholders by reinvesting in existing businesses, by making acquisitions that will strengthen and complement our portfolio, by divesting businesses that are no longer strategic or aligned with our portfolio and where such divestitures can generate capacity for strategic investments and initiatives that further optimize our portfolio, and by paying dividends. At any given time, and from time to time, we may be evaluating one or more of these opportunities, although we cannot assure investors if or when we will consummate any such transactions.

Our current cash balance, together with cash we expect to generate from future operations along with borrowings available under our revolving credit facility is expected to be sufficient to finance our short- and long-term capital requirements.

On April 4, 2023, we redeemed all of our outstanding 4.45% senior notes due 2023, of which $300 million aggregate principal amount was outstanding upon redemption.

On April 3, 2023, prior to the Separation, Crane Company paid a dividend to Crane Holdings, Co. in the amount of $275 million.

In March 2023, Crane Holdings, Co. entered into a new senior secured credit agreement, which provides for a $500 million, 5-year revolving credit facility and a $350 million, 3-year term loan facility. Funding under each facility became available in connection with the Separation, upon the satisfaction of customary conditions of facilities of this type. On March 31, 2023, Crane Holdings, Co. borrowed the full amount of the Term Facility.

Operating Activities

Cash provided by operating activities was $35.5 million in the first three months of 2023, as compared to $29.8 million during the same period last year. The increase in cash provided by operating activities was primarily driven by lower working capital requirements.

Investing Activities

Cash flows relating to investing activities consist primarily of cash used for acquisitions and capital expenditures, and cash provided by divestitures of businesses or assets. Cash used for investing activities was $4.0 million in the first three months of 2023, as compared to $2.5 million in the comparable period of 2022. The increase in cash used for investing activities was primarily related to $1.5 million higher capital expenditures. Capital expenditures are made primarily for replacing equipment, supporting new product development, and improving information systems.

Financing Activities

Financing cash flows consist primarily of repayments of indebtedness, proceeds from the issuance of long-term debt and debt issuance cost on new credit facilities. Cash used for financing activities was $46.6 million during the first three months of 2023 compared to $22.9 million in the comparable period of 2022. The increase in cash used for financing activities was primarily driven by the $392.6 million Net transfers to Crane, partially offset by $350.0 million of proceeds from the Term Facility.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Recent Accounting Pronouncements

Information regarding new accounting pronouncements is included in Note 1 to our Condensed Combined Financial Statements.