Q2 2022 Crane Holdings Co Earnings Call

Yes.

Greetings and welcome to Crane's second quarter 2022 earnings call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad. Please note. This.

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

Thank you operator, and good day, everyone welcome to our second quarter 2022 earnings release Conference call I'm, Jason Feldman, Vice President of Investor Relations on our call. This morning, we have Max Mitchell, our President and Chief Executive Officer, and Rich Maue, Our senior Vice President and Chief Financial Officer, We will start off our call with a few prepared remarks.

After which we will respond to questions. Just a reminder, that the comments we make on this call may include some forward looking statements. We refer you to the cautionary language at the bottom of our earnings release and also in our annual report 10-K, and subsequent filings pertaining to forward looking statements.

Also during the call we will be using some non-GAAP numbers, which are reconciled to the comparable GAAP numbers and tables at the end of our press release and accompanying slide presentation, both of which are available on our website at www Dot Crane co dot com in the Investor Relations section now, let me turn the call over to Max Thank.

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

Another strong quarter with solid results across the board.

Second quarter, adjusted EPS was $1 90.

Consistent with our expectations and our guidance commentary and.

And compared to $1 93 in the second quarter of 2021.

Remember that the may divestiture of crane supply reduced EPS by.

By approximately <unk>.

Both sequentially and compared to the prior year.

We also delivered core sales growth of 7% with.

With further strength in demand reflected in core order growth of 14%.

<unk> core backlog growth of 21% compared to last year.

Continued solid underlying trends in our primary end markets.

Clearly momentum continues with another quarter of strong results differentiated execution, despite a challenging operational environment as well as further evidence of our success in driving accelerated growth.

Across all of our businesses, our commercial excellence innovation and investment in technology Roadmaps.

Support our ability to drive outperformance compared to our peers across the cycle in an environment with continued supply chain constraints.

In addition, everything is on track and progressing towards our early 2023 separation, which will unlock shareholder value and permit each post separation company to optimize investment and capital allocation and further accelerate growth.

Starting with the market environment, we continue to see robust demand across our end markets. We are carefully watching for any signs of softening, but order rates remained strong across our businesses.

The supply chain, including material and component availability remained challenging but still fully consistent with the outlook. We provided in January of this year we.

We've clearly planned appropriately for this environment.

From a cost inflation perspective, we continued to be assertive with pricing actions across all of our businesses and we continue to fully offset the impact of inflation.

Overall, we still believe that we planned appropriately when we entered 2022 and that our current guidance is consistent with the demand conditions and supply chain constraints. We are seeing today, we expect similar conditions to persist throughout the year.

Consistently delivering on our commitments the year is playing out as expected and.

And beyond execution for 2022, we remain intensely focused on all strategic initiatives advancing technology to position our businesses for the future and preparing for the next step of our journey. The April 2023 separation into Crane company and Crane NXT.

Each segment also continues to execute for growth.

We remain highly confident in our ability to drive a 7% to 9% sales CAGR at aerospace and electronics through the end of the decade.

Process flow technologies continues to drive record levels of product vitality and innovation.

And at Crane, NXT, we are aligned with secular trends and macro drivers and delivering solutions that enhance productivity and efficiency for our customers with leading technologies.

So in summary, excellent execution and all efforts on track an exciting set of opportunities for these businesses, both before and after the separation.

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

Thank you Max and good morning, everyone. We continue to make progress both operationally and strategically on all fronts and it shows in our results as we continue to find ways to drive profitable growth even through all of the challenges we are facing today.

My Thanks, again to our leadership teams and associates globally for their focus and dedication driving sustainable value creation for all our stakeholders.

Moving to segment comments that will compare the second quarter of 2022 to 2021, excluding special items as outlined in our press release and slide presentation.

Starting with aerospace <unk> electronics sales of $162 million increased 3% compared to last year. The segment margins of 17, 5% were similar to last year's last year's 17, 8% and down from 19, 6% last year, when we had particularly favorable mix.

In the quarter orders increased 27% compared to last year, but with sales still constrained by material availability.

We are seeing improvement sales improved sequentially from last quarter by 3% and we expect further sequential improvement in the second half of this year as the supply chain constraints continue to moderate gradually.

In the quarter total aftermarket sales remained strong and were up 7% compared to the prior year.

Aftermarket strength was led by commercial up 15% drew.

Driven primarily by spares and repair and overhaul.

Defense aftermarket sales declined 6% and based on program timing and some temporary shipping delays.

Commercial OE sales increased 13% compared to the prior year driven by higher build rates.

Defense OE sales declined 9% due to program timing and some transient material availability constraints.

As we discussed earlier this year at our Investor Day event, we are very excited about the outlook for this business and continue to have confidence in a 7% to 9% sales CAGR over the next decade.

Our confidence in this outlook is based on our differentiated technology. Our continued post COVID-19 commercial aerospace recovery and the numerous major multi year programs, particularly on the defense side of the business that we have already won.

So this year, specifically, we had solid performance that improved progressively over the last six months and we expect modest continued sequential improvement in sales over the remainder of this year.

Given the expected timing of specific projects, we expect margins to be strongest in the fourth quarter of this year and we remain on track for full year margins of approximately 18%.

At process flow technologies sales of $296 million decreased 5% driven by a 7% impact from the main divestiture of crane supply and a 4% impact from unfavorable foreign exchange, partially offset by 6% of core growth.

Operating profit decreased by 6% to $46 million, but adjusting for the divestiture of Crane supply operating profit was approximately flat compared to the prior year.

Operating margins were basically flat at 15, 6% compared to 15, 7% last year.

Pricing continues to fully offset material inflation.

Sequentially compared to the first quarter.

Core FX neutral backlog increased 5%.

With core FX neutral orders up 7%, both adjusted for the Crane supply divestiture.

For reference backlog, a crane supply in the first quarter was $32 million.

Compared to the prior year core FX neutral backlog increased 14% and core FX neutral orders increased 8% also both adjusted for the Crane supply divestiture.

Backlog related to Crane supply last year was $25 million.

Continued strong leading indicators, suggesting that we will see strong continued growth throughout 2022 led by our process business, where overall order rates have already recovered to approximately pre COVID-19 levels.

The strength is being led by the chemical pharmaceutical and general industrial end markets.

After adjusting for the crane supply and divestiture.

Which contributed approximately $45 million of sales in the second quarter.

We expect third and fourth quarter sales run rate to be similar to the second quarter.

However, we do expect margins to improve sequentially in the third quarter and then again in the fourth quarter.

Moving to payment and merchandising technologies sales of $334 million in the quarter increased 2% driven by a 7% increase in core sales, partially offset by a 5% impact from unfavorable foreign exchange.

Segment operating profit increased 4% to $81 million.

Operating margins improved 50 basis points to 24, 2%, reflecting strong pricing and productivity, partially offset by unfavorable mix.

Currency markets are behaving as anticipated and previously communicated with core sales roughly flat compared to last year in the quarter.

Remember currency hit New records in both U S and international sales last year.

Full year 2022 will decline modestly and we will then resume growth from an elevated base next year.

At CPI broad based strength continues with double digit core growth. Our gaming business has been very strong vending continues to improve and the level of activity in the retail market remains very encouraging we continue to see a proliferation of different solutions across the retail space, but the common theme is the need for productivity.

<unk> in an inflationary environment with labor shortages.

For the segment, we expect sales to be similar sequentially from Q2 to Q3 before picking up further in Q4.

From a margin perspective, we do expect margins to moderate in the second half due to anticipated mix, while full year segment margins are on track to reach approximately 23%.

Seeding last years record levels.

Engineered materials sales of $73 million increased 23% compared to the prior year operating profit increased 40% to $11 million.

Operating profit margins increased 180 basis points to 14, 8% stress.

Strength was broad based across end markets and led by RV and building materials. This segment remains on track to achieve previously issued full year guidance of 13, 5% margins and 5% core growth.

Free cash flow was $92 million in the quarter and consistent with our normal seasonality and a significant pick up relative to the first quarter adjusting for onetime cash outflows related to our portfolio actions. We believe that we are on track to achieve our full year adjusted free cash flow guidance of $350 million to $390 million.

However, it will be more backend loaded than normal given higher working capital related to the market recovery, most notably some improving inventory and in many cases, we're making very conscious deliberate decisions to add inventory in the near term.

Best protect our customers.

Our balance sheet is in extremely good shape by the end of the year, we expect adjusted gross leverage towards the bottom end of the two to three times Moody's gross debt to EBITDA target range for our current credit rating.

Turning to guidance, we are maintaining our adjusted EPS range of $7 45 to $7 85 for the full year.

As a reminder, when we announced the sale of Crane supply in April we maintained our then guidance range of $7 to $7 40.

Despite the loss of seven months of earnings contribution from that business. So effectively it was a 25% operational guidance increase at that time.

Shortly thereafter in May we updated our guidance once more to reflect adding back the earnings of engineered materials. After it no longer met the criteria for discontinued operations, resulting in our existing $7 45.

To $7 85 range.

There was no change in our operational guidance assumptions in May and we continue to remain confident in that outlook, despite incremental foreign exchange headwinds of approximately 10.

From a cadence of earnings perspective, and timing through the quarters, we expect the third quarter to be similar to the second quarter. After adjusting for the approximate 10 cents of earnings contribution from Crane supply in the quarter.

Said another way, we expect third quarter EPS declined sequentially about 10.

Which is the amount crane supply contributed in the second quarter prior to the may divestiture of that business.

We then expect the fourth quarter to be stronger driven primarily by sequential margin improvement at process flow technologies in both sequential sales and margin improvement at aerospace and electronics.

Regarding the separation of our work is progressing very smoothly.

We have completed the required carve out financials and associated audits and we are making good progress preparing the initial form 10 filing.

We have completed the future state designed for both post separation businesses across every corporate function.

We have made substantial progress on the staffing of both corporate organizations.

<unk> corporate associates now know what company they will be working for as well as the specific role and we are executing against a structured hiring plan to fill the remaining open roles over the next eight months.

And we continue to further refine the details of the post separation capital structures, our financing plans and our plans for legacy liabilities and we expect to be able to share those details in early fall of this year.

Overall, we are on track to complete the separation in the 12 month period, we communicated on March 30th.

A solid outlook and even more exciting times ahead as we enter 2023 and complete the separation. We are all energized with the progress that has been made to date and the opportunities that we are unlocking and pursuing everyday.

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

Thank you as he would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if he would like to remove your question from the queue and for your participation.

But using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

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

Thanks.

Morning.

So first question maybe on process flow could you maybe put a little bit of a finer point around maybe.

6% organic how much of that is volume versus price and then maybe add a little bit more detail around geographic and end market color and then I have a fall.

Yes, so for the volume price we did see.

A very modest drop in volume so the substantial majority or all of it was related to price in the quarter.

When you look at the order profile. However, you noted some of the commentary and what you saw in the release, we feel we feel really good about the.

The level of demand the nature of the demand and the backlog that we have to execute against so.

Pretty.

Pretty positive about where we are today in relation to the second half of the year.

From a geographic perspective, I would say that.

Not too much has changed since the last quarter.

Yes, I would say.

<unk> continues to be fairly strong here in the Americas is improving in Europe a bit.

China remains a little bit constrained with respect to.

Those end markets and Covid restrictions and so forth.

Other than that I would say, it's fairly fairly stable since the first quarter. The only thing I might mention is.

Less material, but our nonresidential U K.

Business seeing seeing some early signs of.

Some.

Push outs projects being questioned.

Not unexpected.

Actually, but thats, probably the only sign that I would say.

Got it.

As much as my follow up maybe just talk a little bit more detail around the currency business, obviously very tough compares there no doubt about it.

But when I look at kind of the numbers coming out of the <unk>.

And where they're at fiscal year to date on their production seemingly below tracking below the low end of an extremely wide range that they issued with respect to the purchase order I was wondering if you could comment on what sort of dynamic you might be seeing there and if you have any early thoughts on <unk>.

Fiscal 'twenty three is I know, they're planning process is well underway right now.

Thanks, Matt.

All positive in that.

The main reason for the below the wide range is the work in progress that needs to be.

Set aside for next series and as we've mentioned in the past.

A very very close partnership with crane currency on the micro optic thread that we will we strongly expect added content.

Next series introduced so theres, a tremendous amount of work in progress being made.

There needs to be press time set aside for the trial runs.

And Thats impacting in addition to Bep.

Has been hit like many of us with.

Covid related challenges other other particular challenges specific.

Get into but I think the demand is still strong I think.

T.

Desire from the fed to have an increased shipment level would be ideal, but I think the beat.

<unk> is doing a fantastic job trying to manage through that the best they can.

While also getting prepared for the future.

Hopefully that gives you.

Some insight that it's all very positive trends for the longer term and I think in terms of 2023.

Bodes well for <unk>.

Taking.

Almost a maximum that the bep can continue to try to.

Get out while also.

Conducting trials.

The only thing I would add Matt is just that I think we planned accordingly for the year as well so notwithstanding that there at that lower end of the range, we still feel real good about.

Where we are in the year and what we have left to do and I would say just outside of the U S. We continue to see some nice momentum starting to build again on the international side Youll recall that last year on the international side. It was a really really strong year.

And caused some tough comps for us.

But we are seeing some nice some nice pickup in order flow.

And that will benefit us going forward as well in 2023.

Understood. Thank you guys.

Thank you.

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

Good morning, everyone.

I'm going to follow up more on.

Price versus volume.

Obviously prices.

A big contributor to a lot of companies growth not just yours at the moment.

Any more color you can give us on price versus volume in order rates backlog growth those kinds of things.

And any color or any detail on the different segments and just any more details you can give us on processes volume to the business.

Yeah, what I would say is from a price price volume point of view in each of the businesses in process I would say that we're making similar progress.

Cross all its not unique to the.

The process end market business or in or unique to the commercial side. So we're making progress across all I would say that the <unk>.

Price material cost relationship is.

Generally slightly positive across all I think we're able to hold our margin profile with the process that we've been executing across.

That business so.

There is not one unique spot Nathan thats stronger than another necessarily its the teams are executing really well across the board price cost I think it's generally.

Check me Jason.

Jason but I think it's generally.

Accurate to say that while we.

<unk> been a little supply constrained managing to the sales.

And price volume there is more.

Offsetting in our in our backlog and order rates, though we do see.

Our core volume increasing significantly versus just price without it yes, I mean, if you look at the order increases that you see what we've shared.

<unk>, that's volume versus prices significantly outweighed by volume there isn't a lot of I would say.

It's weighted towards volume.

Having said that we feel very confident about the pricing that we have in the backlog as well.

Where it's positioned and that means for us.

Sure.

That is the volume increases in orders and backlog is across all of the businesses are more heavily weighted to one or the other.

I would say it's fairly widespread right.

Okay fairly widespread.

That's helpful. Thanks.

I just wanted to get one on engineered materials.

Didn't go through.

Can you talk about the plans to that I mean, obviously that business has historically been fairly cyclical interest rates going up and consumer confidence going down.

Are there strategic buys out there does the current environment business is obviously performing really well, but does the current environment reduced the outlook for price and could that lead to you're not selling it just any thoughts that you have about that.

Excellent. Thank you just just a reminder, we I hope investors appreciate.

Significance with which we are.

Addressing the portfolio comprehensively and really positioned well to add significant value with the separation moved on crane supply clearly indicated for years that while a great business and a great team.

Engine materials was not strategic we finally move forward with the sale process very unfortunate.

After a very long process with.

The potential buyer that the regulatory environment today with just a minor overlap in building products.

The sale was.

Was effectively blocked now unfortunately, the time has not been in our favor.

And.

With everything else that's going on at Crane, what we're focused on where the market is.

Not unexpectedly.

I think this is.

From a macroeconomic standpoint, I think we all kind of clearly see that a minor recession is underway consumer discretionary is impacted first.

Seeing some.

Hinting that the back half, although we are we feel very solid about our guidance, it's not not.

Going to impact our performance at all.

<unk>.

We're seeing some some adjustment and instrument cereals. So net net I think investors should feel that engineered materials stays with crane for the foreseeable future is most likely and then.

It's a great business great team continues to drive.

Nice free cash flow in the U S that will.

We'll continue to deploy in.

We'll address this again at the right time in the future so I'm thinking about.

That makes sense I'll pass it on thank you for taking my question.

Thanks, Nathan Thank you.

Our next question is from Damian Karas with UBS. Please proceed.

Hey, good morning, guys.

Hi, good evening.

I wanted to ask you about PMT.

I Didnt hear you mentioned anything about shipment timing or anything that seasonal that nature.

So I'm just wondering for the second quarter is it fair to assume that the underlying demand is just coming in.

Above expectations and if so where are you seeing that mostly.

I think I might say in line with expectations right. I mean, we're tracking I think pretty well for the growth that we'd expected for the year there had been a little bit of a shipment timing, we mentioned last quarter.

Which favored <unk> at the expense of <unk>, but.

But nothing more to kind of add on that.

Yes, the only thing I would add just in just in terms of where we're seeing I would say the percentages and the growth. It's really in line frankly with with our guidance and what we would've thought but we are as I mentioned to Matt a few minutes ago. We are seeing some nice momentum on the currency side on the international portion of the business but.

If you flip them back to the payment side and.

Continued strength in retail continue but in terms of in terms of.

Percentages and so forth, it's what we expected strength in gaming continues as well.

So that would be worth mentioning.

Yeah.

We haven't talked about this with investors to date, but on a year over year basis, I mean, the core strength, we're seeing in our end markets of gaming retail.

Our systems business, it's been very strong and on a year over year basis, we had a bit of a tailwind well just a strong end market dynamic last year with.

Bitcoin kiosks actually.

We are.

We have had questions in the past about crypto and the threat of bitcoin. Meanwhile.

A bitcoin kiosks are a huge driver for us last year.

Taking cash from individuals and converting it into bitcoin now since bitcoin and crypto has crashed we've seen a dramatic decline in that end market move. So you can imagine the offset.

In our other markets. It just continues to be very very strong I just want to overemphasize the strength that we see the tailwind we're still under 2019.

Revenue.

I think we have significant end market trends and movement into 2023 and beyond just all positive indicators I don't know if you want to frame up yes, no thats a good.

It's an excellent point, we grew if you look at Q1 and Q2 in the legacy payment components business. We grew in the double digits right on a core basis and that includes really having that business at Max just mentioned bitcoin being right now at zero. So.

Just to put some context around that the growth in the underlying business beyond that is obviously north of that.

Got it got it thanks for the helpful color.

And then Rick you mentioned that.

Actions at Crane, taking to secure inventory for your customers.

I was wondering if you could maybe just walk through your assessment of where inventory levels are when you look across the various distribution channels.

Your business out into.

Yes. So for example in.

General industrial here in the U S in process I would say that they are.

<unk> now there is not.

Theres still quite a bit too.

Just pure underlying demand I think in that in that part of the business, where it's the primary distribution arm for US right now the segment, where we sell into so.

Yes, they don't have a whole heck of a lot of inventory.

Still there is still needed my comment on that right was to secure inventory levels to make sure that we can satisfy demand just given lead times right. So we're making conscious decisions in certain of our business units to make sure that we have that inventory.

To be able to deliver to our to our customers, but even having said that I wouldn't say it's unnatural.

Unusual, yes, I think it's more.

More surgical one there's a couple of strategic but.

Some slightly higher inventory levels that were essentially trying to bring in but nothing.

Too dramatic.

Okay got it thanks guys.

Yes.

Thanks, David.

Our next question is from Elizabeth Grenfell with Bank of America. Please proceed.

Good morning, Good morning, good morning, Mike.

And I was hoping you could give us a little more color.

Klein and defensible.

And the aftermarket side and when you expect that to turn.

The headwinds that youre seeing sort of the timing around that.

Thank you.

Yes, so the declines that we're seeing we are I think largely expected when we came into the year, we guided down on on defense.

As a reminder, we have.

We've grown in the 20 plus percent range for the last couple of years. So we really did enjoy some really really strong growth over the last couple of years coming into 2022.

So some very unfavorable comps.

When you think about.

Some of the some of the shortfall I did make some comments with respect to material availability and some timing.

That's on the margin around it just to give you some context.

We would expect that to start to turn around next year, maybe in the latter half or so.

It's one of our thinking but.

Yes, it's I would I would say, it's just broad strokes is that it wasn't unexpected as we guided into the year with down defense.

We participate primarily in ISR, if you think about some of the.

The areas, where folks are maybe enjoying a little bit more growth versus versus us in the current year so that could.

It's where we play effectively versus others.

Great. Thank you very much.

Thanks Elizabeth.

And our next question is from Christine <unk> with Morgan Stanley . Please proceed.

Hello, and good morning, everyone.

<unk>.

Hey on the Crane supply side.

Are you thinking about using the proceeds and has there been a change in your capital deployment priorities given the tougher macro environment.

Yes, so theres some strategic things that I think you might be aware that we are working on.

We've been I think pretty clear about initiatives around Feazing asbestos for example that could be a potentially use of those proceeds.

Certainly we continue to plan for the separation and setting up the capital structure from both organizations post separation.

This is another area of that.

That could benefit us as well as we think about setting those those those companies up even excluding if I can maybe I'll provide a little bit more color.

On the capital structure of both those organization post post separation.

Setting aside crane supply.

It is really really important to us that we set up both these businesses to be hugely successful from a capital deployment perspective, being able to grow through M&A and frankly, just execute on their respective strategies.

I would share with you right now is when you look at.

Our net debt to EBITDA level in both those organizations our current thinking right now is that at crane.

Crane company, we would see a sub one times net debt to EBITDA.

And both of these numbers I'll give you are including asbestos assuming actually I have is vestas.

One times net debt to EBITDA at Crane Company, and then at Crane NXT somewhere around one five times net debt to EBITDA, so very very strong.

Our balance sheet positioning for both those organizations post separation if that helps and then between now and the end of the year, we certainly have our.

Plate is full with what we're executing on and executing well.

It would have to be very strategic for us too.

Entertain an acquisition between now and our separation in April . However, we have significant activity continues funnels across all organizations and plans to.

Deploy.

Yes.

Quite hopefully quite soon after separation.

Thanks, and if I could do a follow up I mean with respect to filling out the management team for Crane next.

With the rise and fall of crypto plus the macro headwinds that we're seeing today have any of these items like you to think differently about leadership and strategy for that business.

Think this is going to be a growth.

Segment or is it going to be just a cash generative segment, how has that evolved as we factor in what's happened in the past few months.

We've always felt that it was the growth.

The opportunity in the leader, we're looking forward is going to be.

Clearly capable of.

Continuing to drive that growth as we move forward not just with the core but in adjacencies as well without a doubt.

Great. Thanks, guys.

Thanks Christy.

And we do have a follow up question from Damian crashed with UBS. Please proceed.

Hi, guys just a couple of quick follow ups here.

I was wondering if you could help us on the math on PFT just thinking about the.

The margin improvement in the back half you kind of need to be.

17% or a little bit better I think that to hit the full year guide so.

Rich maybe you could just.

Walk us through like how much of that is from crane supply.

Coming out and what's the what's a good way to think about kind of the incremental margin for that business now X X the distribution business.

Yes, it's largely we did have some unfavorable mix that will that hit us here.

Expected in the first stuck first half of the year, we do expect to see that improve in the second half of the year I would say it's.

We would see improvement.

Mainly in our process the process side of PFT.

So.

Mix of the types of solutions that we're selling into the different end markets. The different brands that we have beginning to contribute more meaningfully in the second half. It really is just the mix of products that we're selling.

Relative to where we are here in the first half.

To execute on the repositioning savings as well, where we should see some of that incrementally increase as we move through the balance of the year.

Then just continued strong price cost management it is going to be those elements that really get us there and honestly I feel pretty confident in that target for us.

It's not so much driven by crane supply, it's really more of the underlying fundamentals of what we see happening in that in that in that business.

And Mark Incrementals.

It was the other part of your question.

A little tricky given all the moving pieces with inflation and price and whatnot, but I think over the long over the long term we've without.

Without supply we've talked about this being a 35% to 40% incremental margin business.

Got it.

<unk> right now that may be obscured in any given quarter, but that's kind of the underlying long term.

The structure of the business.

Thanks Jacob.

And rich you kind of set yourself up with this one I couldnt I can't resist.

Yes.

Would you say the probability is that.

There is some actions related to that before the year ended the year.

Well I'll take it Jamie.

It's.

The significant interest we are continuing to progress.

And progressing very very well.

Just leave it at that.

Alright fair enough. Thanks, again, guys best of luck.

Thanks, David Thanks Damian.

We have reached end of our question and answer session I would like to turn the conference back over to Max Mitchell for closing comments.

Thank you operator, another quarter with solid performance and further steps on our path to separation to drive further shareholder value.

The late Great actor James Caan.

Third as Sunny Corleone in the godfather, when discussing a meeting with <unk>.

What did he say.

Beat but above by the book a beep he wants us to send Michal to hear the proposition and the promise is the deal is so good that we can't refuse.

As fans of the Godfather series, Rich and I and the Crane team have an offer for investors you can't refuse.

Rigorous discipline and a differentiated execution consistent investment for growth, where our momentum is building and we're showing accelerating results and a firm commitment to shareholder value creation, including disciplined acquisitions portfolio shaping through divestitures and now a separation that will position our businesses for further acceleration of growth.

What an exciting story and I look forward to sharing updates with all of you over the next several quarters. Thank you all very very much and have a great day.

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

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