Q3 2025 Crane Co Earnings Call

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I would now like to turn the call over to Alison <unk>, Vice President of Investor Relations.

Thank you operator, and good day, everyone welcome to our third quarter.

Earnings release Conference call and also for New York, Vice President of Investor Relations.

Speaker #1: Suggested . Yeah . Thanks , Scott . Well , you could argue that the murder of Stokes in the long term is absolutely aimed at gaining content on the AP 1000 .

Speaker #1: At this time , all participants have been placed on a listen only mode and the floor will be open for your questions . Following the presentation .

On our call. This morning, we have Max Mitchell, our chairman President and Chief Executive Officer, Alex Alcoa, Executive Vice President and Chief operating Officer, and Rich Maue, Our executive Vice President and Chief Financial Officer, along with Jason Feldman Senior Vice President Treasury tax and Investor Relations, who is on for Q.

Speaker #1: We , the team has already underway with technology investments to penetrate the pressurized water reactor . In addition to boiling water . So long , you know , long term .

Speaker #1: If you would like to ask a question at that time , please press star One on your telephone keypad . If at any point your question has been answered , you will remove yourself from the queue by pressing star two so others can hear your questions clearly .

Speaker #1: Absolutely . As we continue the current team is doing a phenomenal job and has done as we as we have when we first won AP 1000 content many , many years ago to the tune of about 10 million per ship set , we're identifying another 30% increase in content right now that we're bidding on capturing additional share gain also .

Hi.

We will start off our call with a few prepared remarks from Mac Arlington Rich after which we will respond to your questions.

Speaker #1: We ask that you pick up your handset for best sound quality . Lastly , if you should require operator assistance , please press star zero .

Just a reminder, the comments we make on this call.

Speaker #1: I would now like to turn the call over to Allison Poliniak, Vice President of Investor Relations.

You bet.

We refer you 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.

Speaker #2: Thank you , operator and good day , everyone . Welcome to our third quarter 2020 earnings release conference call . I'm Allison Poliniak , Vice president of investor relations .

Speaker #1: So both organically as well as inorganically as we move forward , for sure . And that was an exciting announcement today . Exciting announcement that I think in addition to the announcement today , related to the 80 billion investment that the government announced in support .

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.

Speaker #2: On our call this morning, we have Max Mitchell, our Chairman, President, and Chief Executive Officer; and Alex Akula, Executive Vice President and Chief Operating Officer.

Speaker #1: I think you're just seeing this change over time that will continue this trend of nuclear as part of a broader global solution to clean and efficient power that will continue to bode well for us in our position .

Okay.

Speaker #2: And Richard Maue , our executive vice President and chief financial officer , along with chief Feldman , senior Vice president , Treasury , tax and Investor Relations , who is on for Q&A .

Now, let me turn the call over to Max Thank you Alison and thanks, everyone for joining the call today.

We are proud to report another strong quarter with results coming in ahead of our expectations.

Speaker #2: We will start off our call with a few prepared remarks from Max , Alex and Rich , after which we will respond to your questions .

Adjusted EPS was $1 64, driven by an impressive five 6% core sales growth, primarily reflecting broad based strength at aerospace <unk> electronics.

Speaker #1: Also .

Speaker #2: Thank you .

Speaker #2: Just a reminder , the comments made on this call will include supportive 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 .

Speaker #1: Thanks , Scott .

Speaker #3: Thank you. Our next question comes from Nathan Jones with Stifel. Please go ahead.

Continued strong execution that process flow technologies.

This quarter's results, yet again underscore our differentiated technologies and operational discipline.

Speaker #1: Nathan . Is there Nathan ?

Speaker #2: Also during the call , we will be using non-GAAP numbers , which are reconciled to the comparable GAAP numbers in tables at the end of our press release .

In addition to our continued long term investments in new technology and solutions.

Speaker #3: Nathan , your line is open . Please check your mute .

Speaker #2: And accompany by fever in patients . Both of which are available on our website at WWE . And the section . Now , let me turn the call over to Max .

Speaker #4: Okay . Sorry , guys . Technical failure on my end . Good morning everyone . Good morning . I'm finding it a bit hard to concentrate with the promise of a signed Richard Maue Crane coffee mug .

<unk> business system.

As she said.

We described in great detail at our March Investor Day, combined with our unique culture enables our teams to adopt.

Speaker #3: Thank you . Allison , and thanks , everyone for joining the call today . We are proud to report another strong quarter with results coming in ahead of our expectations .

To the many unforeseen events that we're all facing every day and deliver on the results.

Speaker #4: I guess .

Speaker #1: Go for .

Speaker #4: It . I guess I just a another question on that sci business is , Max , you . One of the comments you made was that you from a strategic perspective , are more bullish on that business than you were three months ago .

Our pending acquisition of precision sensors and instrumentation from Baker Hughes remains on track to close at year end.

Speaker #3: Adjusted EPs was $1.64 , driven by an impressive 5.6% core sales growth , primarily reflecting broad based strength at aerospace and electronics , and continued strong execution at process flow technologies .

And our strategic outlook for these businesses has only improved over the last three months.

Many work streams are already well underway to ensure a seamless integration and create shareholder value starting day one.

Speaker #4: Maybe you could just talk a little bit more about what you've learned in the last three months , that that makes you strategically more positive .

Speaker #3: This quarter's results yet again underscore our differentiated technologies and operational discipline . In addition to our continued long term investments in new technology and solutions .

Speaker #4: On the outlook for that business ?

Our balance sheet remains very strong our.

Speaker #1: Well , I'll let Alex chime in as well , but it starts with the team itself . And I think we just continue to be impressed with the calibre of the talent that's going to be joining Crane .

Pipeline of acquisitions remains robust and we remain very active on the M&A front.

Speaker #3: The Crane business system , the machine that we described in great detail at our March Investor Day , combined with our unique culture , enables our teams to adopt to the many unforeseen events that we're all facing every day .

And there's a tremendous amount of momentum and continued innovation happening at crane, but Alex will cover off.

Speaker #1: I just love the openness and transparency that that we've been met with to date , so that feels really good in terms of integration , integration , planning , working well together .

As we exit 2025, we are once again, raising but also narrowing our full year adjusted earnings outlook to a range of $5 75.

Speaker #3: And deliver on the results . Our pending acquisition of Precision Sensors and Instrumentation from Baker Hughes remains on track to close at year end .

Speaker #1: It's what I know is taking place already. This is not a team that has stood still. They've been investing for growth.

595 from our prior view of $5 50 to $5 80.

Speaker #3: And our strategic outlook for these businesses has only improved over the last three months . Many work streams are already well underway to ensure a seamless integration and create shareholder value .

Speaker #1: And we're going to get quickly , get aligned strategically as we're moving forward . It's just all feels very , very positive from that standpoint .

Given our backlog.

Just an execution and year to date performance.

That reflects 20% adjusted EPS growth at the midpoint compared to 2024.

Speaker #1: Sharing of data , kind of getting clarity strategically on what we're going to be working on together from day one . It's been a fantastic relationship .

Another outstanding year for Crane, and our shareholders.

Speaker #3: Starting day one , our balance sheet remains very strong . Our pipeline of acquisitions remains robust and we remain very active on the M&A front .

And as we look to 2026, our consistent investment thesis remains firm the.

Speaker #1: What else would you highlight ? Alex . Yeah , I think over the these months , Nathan just getting more clarity on the specifics of how we're going to collaborate and work together .

The strength of our underlying business, our strategy and our capabilities in both operational execution on commercial excellence support our 4% to 6% organic growth assumptions.

Speaker #3: And there's a tremendous amount of momentum and continued innovation happening at Crane . But Alex will cover off as we exit 2025 . We are once again raising , but also narrowing our full year adjusted earnings outlook to a range of $5.75 to $5.95 from our prior view of 550 to 580 .

Speaker #1: You know , the detailed plans and the opportunities . Just having very clear line of sight to the gains , starting with the aerospace and drug in the nuclear .

Leveraging on average of 35% into next year.

We will provide greater detail on 2026 expectations as.

Speaker #1: Also with Parametrics and just a level of detail that we've been able to get . And the plans of what we're going to prioritize and we're going to where we're going to be able to have quick gains , gives us these higher confidence that we were three months ago .

As well as <unk> in early January once we officially closed on the acquisition.

Speaker #3: Given our backlog consistent execution and year to date performance , that reflects 20% adjusted EPs growth at the midpoint compared to 2024 . Another outstanding year for Crane and our shareholders .

Now, let me pass it over to our Chief operating officer, Mr. Alex our color to provide some color on the current environment and segment performance.

Thanks, Max first let me comment on the pending acquisition of CSI.

Speaker #1: So it just keeps increasing as those plans get more defined and more details get clarified . .

Speaker #3: And as we look to 2026 , our consistent investment thesis remains firm . The strength of our underlying business , our strategy and our capabilities in both operational execution and commercial excellence support our 4 to 6% organic growth assumptions , leveraging on average a 35% into next year .

As Mike said.

The acquisition remains on track to close January one and the integration planning is well underway and progressing smoothly with the existing Baker Hughes and credit teams.

Speaker #4: And I guess I'll just ask a broader question about 2026 . You guys have always been pretty willing to share your outlook . So I mean , are you're obviously going to get towards the top end of the growth , 4 to 6% growth target this year ?

As you would expect.

My team and I as well as the PSA leadership have been intimate with all closing details on integration planning to accelerate strategic execution in 2026.

Speaker #4: We have seen organic growth slow down a bit as we've gone through the year . Maybe you could just talk about do you think we're in the 4 to 6% range next year .

Speaker #3: We will provide greater detail on 2026 expectations as well as Sci . In early January . Once we officially close on the acquisition .

As we discussed last quarter, each brand will contribute a robust and complementary technology further strengthening the claim portfolio.

Speaker #4: Maybe it'll be a little more towards the middle next year or just any thoughts you have on on how the growth outlook might shake out for next year .

Speaker #3: Now, let me pass it over to our Chief Operating Officer, Mr. Alejandro Alcala, to provide some color on the current environment and segment performance.

Combined with the power of the Crane business system piece.

Speaker #1: Well , it's still early days . We've got our planned meetings coming up . There's a there's a lot to to , you know , monitor here in the fourth quarter .

Sai will be accretive to our financial profile.

Both margins and growth within the next few years.

Speaker #3: Thanks , Max . First , let .

Speaker #2: Me comment on the pending acquisition .

Speaker #3: Of Sci as Max said , the acquisition remains on track to close January 1st and integration . planning is well underway and progressing smoothly with the existing Baker Hughes and Crane teams .

And our confidence and what will deliver has only increased as we work closely with the <unk> team on a daily basis planning for day one.

Speaker #1: Having said all that based on what I know today , based on what we feel today , based on thinking through the end markets and how that will continue to play out , it still feels like our investment thesis holds into next year .

In terms of further M&A.

Our funnel of opportunities remains full.

Speaker #3: As you . would expect , my team .

Speaker #1: Nathan, from that standpoint.

Speaker #2: And I, as well as the Sci.

The deals we are working on today include opportunities in both aerospace and electronics as well as process both technologies.

Speaker #3: Leadership have been intimate with all closing details and integration planning to accelerate strategic execution in 2026 . As we discussed last quarter , each brand will contribute a robust and complementary technology , further strengthening the Crane portfolio .

Speaker #4: Okay . I guess we'll wait for the full Q update . Thank you very much for taking my questions .

Speaker #1: Thanks , Nathan .

And most range in deal size purchase price.

Speaker #3: Thank you . Our next question comes from Jordan Leone with Bank of America . Please go ahead . Your line is open .

From 100 million to $500 million.

Now some thoughts on the segment in the quarter.

Speaker #5: Hey good morning .

Starting with aerospace and electronics.

Speaker #1: Good morning .

Speaker #2: Combined with the .

Speaker #5: I'm a defense and aero . How should we think about the opportunity for you guys if we start to see announcements for FACs Ka down selects and some of the larger group four and five drones that have been kind of previewed .

Speaker #3: The power of the Crane business systems will be accretive to our financial profile, both margins and growth, within the next few years. Our confidence in what we'll deliver has only increased as we work closely with the SCI team on a daily basis.

Aerospace and defense markets remain very strong.

The backlog, we built in new programs and opportunities. Our teams have one provide a strong visibility into 2026 and beyond.

On the commercial side of the business.

Speaker #3: Planning for day one . In terms of further M&A . Our form of opportunities remains full . The deals we are working on today include opportunities in both aerospace and electronics , as well as process flow technologies and both range in deal size , purchase price from 100 million to 500 million .

Speaker #1: Yeah . Jordan . So this is Alex , you know , on the FCS or the just the Ngad platforms . We are very well positioned on all all the demonstrators really .

<unk> remains healthy with Boeing and Airbus continuing to ramp up production.

And aftermarket activity continued at elevated levels.

On the defense side, we continue to see solid procurement spending.

Speaker #1: So we've been successful in having , you know , multiple horses in the race . So we're going to see strong benefit from that .

And our continued focus on reinforcing the product defense industrial base.

Speaker #1: On the Ka activity . I think , you know , we've mentioned we've already secured a position with one of the leading emerging players in that space with TKA , which is going to start ramping up here in the years to come .

Given heightened global uncertainty today.

Speaker #3: Now , some thoughts on the segments in the quarter , starting with aerospace and electronics , aerospace and defense markets remain very strong .

Looking ahead to the balance of 2025.

We now anticipate core sales growth for the year to be up low double digits compared to our prior view.

Core growth to be up single digits to low double digits.

Speaker #3: The backlog we built a new programs and opportunities . Our teams have won , provide a strong visibility into 2026 and beyond . On the commercial side of the business , activity remains healthy , with Boeing and Airbus continuing to ramp up production and aftermarket activity continued at elevated levels .

Speaker #1: And then in general , in drones , right ? We're actively involved . Overall , I think , as you know , there's a wide range of drones that exist from the small battery powered Hand-launched , those that are called switchblade or Phoenix .

And that growth will be leveraged at 35% to 40% for the full year.

Our guidance assumes growing year over year, OE sales, partially offset by decelerating year over year growth rates in commercial aftermarket in Q4 that we previously highlighted.

Speaker #1: And we do not participate in that small where we do play is on the medium or larger drones that are part of that ka , like the those that you see called out like Fury , Global Hawk , predator .

Overall, a really outstanding year.

Speaker #3: On the defense side , we continue to see solid procurement spending and a continued focus on reinforcing the broader defense industrial base . Given heightened global uncertainty today .

We also continue to win new business and pursuing new opportunities across this segment.

Speaker #1: So, we’re well positioned there with various solutions, and we expect the benefit of that as the market continues to grow.

That gives us confidence that we will continue to see above market growth for the remainder of this decade.

Speaker #3: Looking ahead to the balance of 2025 , we are now anticipate core sales growth for the year to be up low , double digits compared to our prior view .

Speaker #5: Okay . Got it . And then two on for how strong demand has been book to bill in aerospace and electronics . How were you guys thinking about the current capacity you have in place to meet that demand ?

Let me highlight a few examples.

Speaker #3: For core growth to be up single digits to low double digits , and that growth will be leveraged at 35 to 40% for the full year .

First.

<unk> continues to win funded next generation military demonstrate a programs for our brake control systems.

Speaker #1: As far as capacity , we're we've been we're well prepared to meet that demand . And the ramp up rates of the OEMs , both Airbus , Airbus and Boeing .

We're both fixed and rotary wing platforms.

Second.

Speaker #3: Our guidance assumes growing year-over-year OE sales, partially offset by decelerating year-over-year growth rates in the commercial aftermarket in Q4 that we previously highlighted.

We continue to advance our vehicle electrification solutions.

Speaker #1: I think teams have done a really nice job preparing for that . Even taking advantage of preparing inventory buffers to execute at a very high level to support those ramp rates .

Heightened by the launch of our new 200 kilowatt traction motor inverter generator controller product at.

At the Association.

Speaker #3: Overall , a really outstanding year . We also continue to win new business and pursue new opportunities across this segment . That gives us confidence that we will continue to see above market growth for the remainder of this decade .

Of the United States.

Speaker #1: So quite confident in our ability to support .

Army.

Or and USA trade show in October.

Speaker #5: Got it . Thank you guys .

Speaker #1: Thank you . Thanks , Jordan .

We remain actively engaged with defense vehicle Oems regarding collaborations on the common tactical truck and new combat vehicle programs.

Speaker #3: Thank you . Our next question comes from Tony Bancroft with Gabelli Funds . Please go ahead . Your line is open gents .

Related to this our comment that over the past two years.

Speaker #3: Let me highlight a few examples . First , Crane continues to win funding . Next generation military demonstrator programs for our brake control systems for both fixed and rotary wing platforms .

Speaker #6: Hey good morning gents . Congratulations on the great quarter and all your great work . You know , I was I recently toured a new facility and it was was pretty overwhelmed by the amount of automation that was going in into it .

Customer vehicle development efforts with fragmented with numerous concepts in play and uncertainty around government funding.

This year at a USA.

However, the landscape was noticeably different.

Speaker #3: Second , we continue to advance our vehicle electrification solutions , heightened by the launch of our new 200 kilowatt traction motor inverter generator controller product at the Association of United States Army , or AUSA Trade Show in October .

The focus was clear.

Industry attention is now centered on competing for the <unk> and the PTT.

This shift aligns precisely with the strategic direction, we have defined for our defense power business.

With government funding priorities now well established vehicle primes are concentrating their efforts almost exclusively on winning these programs.

Speaker #3: We remain actively engaged with defense vehicle OEMs regarding collaboration on the Common Tactical Truck and new combat vehicle programs related to this. I would comment that over the past two years.

Exciting for us.

And left.

Activity around Air Defense systems remains very robust.

Speaker #3: Customer vehicle development efforts were fragmented , with numerous concepts in play and uncertainty around government funding . This year at AUSA , however , the landscape was noticeably different .

Golden Dawn is still being defined by the Dod.

However, we strongly believe we will benefit directly to existing positions held today on systems like <unk> radar system and Patriot missile programs among.

Speaker #3: The focus was clear , industry attention is now centered on competing for the Xm3 and the CTT . This shift aligns precisely with the strategic direction we've defined for our defense power business .

Among others that will certainly be part of Golden Dawn solution.

Alone pure increased demand drivers.

We also anticipate additional growth from new emerging opportunities our technology is well suited for.

Speaker #3: With government funding priorities now well established . Vehicle primes are concentrating their efforts almost exclusively on winning these programs . Very exciting for us .

Specifically in the scaling and upgrades of radar.

Our unmanned aerial systems.

High power energy and space based assets for Golden Dome.

Speaker #3: And last activity around air defense systems remains very robust . Golden dome is still being defined by the DoD . However , we strongly believe we will benefit directly through existing positions held today on systems like radar system and Patriot missile programs , among others , that will most certainly be part of Golden Dome solution , let alone pure increased demand .

With a record backlog and pipeline of opportunities aerospace and electronics remains poised well outperformance markets over the next decade.

Very proud of our team.

Our process flow technologies similar to Q2 end markets are stable.

And we remain well positioned to outgrow across the cycle.

We continue to see strength in segments, such as wastewater pharmaceuticals, cryogenic and also power.

Speaker #3: Drivers . We also anticipate additional growth from new emerging opportunities that are technology is well suited for , specifically in the scaling and upgrades of radar counter unmanned aerial systems , high power energy and space based assets for Golden Dome .

While chemical markets remain soft yet stable.

As a reminder.

We have systematically reposition our portfolio over the past decade.

Around our core end markets, where we have the strongest competitive position and the most differentiation.

Speaker #3: With a record backlog and pipeline of opportunities . Aerospace and electronics remains poised to well outperform its markets over the next decade . Very proud of our team .

Enabling sustainable market outgrowth.

Tactically, we have proven our ability to react to any changes in demand quickly.

And we will remain nimble taken.

Speaker #3: At Flow Technologies , similar to Q2 and markets are stable and we remain well positioned to outgrow across the cycle . We continue to see strength in segments such as wastewater , pharmaceuticals , cryogenics and also power .

Taken any necessary and appropriate price and productivity measures required.

Our focus on discipline enable us to continue to win in this segment, despite the slower growth environment.

And that was reflected in Q3.

Speaker #3: While chemical markets remain soft yet stable . As a reminder , we have systematically repositioned our portfolio over the past decade around our core end markets where we have the strongest competitive position and the most differentiation , enabling sustainable market outgrowth .

For example.

Our municipal wastewater pump business is on track for double digit growth driven by strong momentum in new product adoption.

At West Tech this year, we introduced the highest density Saiful wastewater pump.

Featuring advanced non clog, impella technology with leading efficiency metrics.

Shipments began in Q3 and as we head into 2026, a robust sales funnel gives us confidence in delivering another year of strong growth for this business.

Speaker #3: Tactically, we have proven our ability to react to any changes in demand quickly, and we will remain nimble, taking any necessary and appropriate price and productivity measures required.

Also.

Speaker #3: Our focus and discipline enable us to continue to win in this segment , despite the slower growth environment , and that was reflected in Q3 .

Our cryogenic business continues to execute commercially with a number of orders across the aerospace and defense space launched satellite production and semiconductor investments.

Overall, we secured double digit growth in new orders in the quarter within cryogenics.

Speaker #3: For example , our municipal wastewater pump business is on track for double digit growth , driven by strong momentum in new product adoption at Westech this year , we introduced a high efficiency side flow wastewater pump featuring advanced non-clogging technology with leading efficiency metrics .

Reflective of RF front end engineering support and manufacturing capability as a differentiator in the market.

Additionally, we won a 6 million large pharmaceutical order supporting capacity expansion to manufacture GOP one drugs.

Speaker #3: Shipments began in Q3 , and as we head into 2026 , a robust sales funnel gives us confidence in delivering another year of strong growth for this business .

Our ability to deliver high performance solution for critical pharmaceutical application continues to differentiate us in a competitive market and positions us well for future growth in this space.

Speaker #3: Also , our cloud business continues to execute commercially with a number of orders across aerospace and defense , space launch , satellite production and semiconductor investments .

And lastly, despite the headwinds facing the chemical industry. Our teams continued to secure targeted opportunities largely tied to preventative maintenance and technology upgrades.

Speaker #3: Overall , we secured double digit growth in new orders in the quarter within cryogenics . Reflective of our front end engineering support and manufacturing capability .

Looking ahead to the balance of 2025.

Given our line of sight today, we maintain our view for core growth to fall at the lower end of our low to mid single digit growth range that we guided to last quarter.

Speaker #3: As a differentiator in the market . Additionally , we want 6 million large pharmaceutical orders supporting capacity expansion to manufacture GOP won drugs .

But with greater margin expansion as core volumes will leverage at the higher end of our targeted range for the full year despite tariff headwinds.

Speaker #3: Our ability to deliver high performance solutions for critical pharmaceutical applications continues to differentiate us in a competitive market and positions us well for future growth in this space .

Overall.

Both our businesses remain well positioned to continue to deliver outstanding results into 2026.

Speaker #3: And lastly , despite the headwinds facing the chemical industry , our teams continue to secure targeted opportunities largely tied to preventative maintenance and technology upgrades .

Now, let me turn the call over to our CFO Nick.

Mr Rich maue for more specifics on the quarter.

Speaker #3: Looking ahead to balance of 2025 , given our line of sight today , we maintain our view for core growth to fall at the lower end of our low to mid single digit growth range that we guided to last quarter .

Thank you Alex and good morning, everyone.

As we were getting ready for our Q3 earnings release this past month.

And as I reflected on the consistency of our execution and overall results generally.

Speaker #3: But with greater margin expansion at core volumes will leverage at the higher end of our targeted range for the full year . Despite tariff .

The movie quote came top of mind that one of our investors mentioned at a recent sell side conference in describing our consistency.

One of my favorite actors Ryan Reynolds had this moving that quote while portraying triple a rated executive protection agent, Michael Bryce and a romantic touching comedy the hitman bodyguard.

Speaker #3: Overall , both businesses remain well positioned to continue to deliver outstanding results into 2026 . Now , let me turn the call over to our CFO , Mr. Richard Maue .

When describing his job.

Boring is always best.

Speaker #3: For more specifics on the quarter . Thank you . Alex , and good morning , everyone . As we were getting ready for our Q3 earnings release this past month , and as I reflected on the consistency of our execution and overall results , generally , a move came top of mind that one of our investors mentioned at a recent sell side conference .

I have heard from many of you and appreciate all of the movie quote suggestions that you have all sent over the last year. So feel free to send me your best thoughts on lines in the future that tightened crane in your view.

And anyone suggesting a quote that we actually use on our call. We will receive a free crane coffee mug autograph by May.

Speaker #3: In describing our consistency . One of my favorite actors , Ryan Reynolds , had this moving quote while portraying triple A rated executive protection agent Michael Bryce in a romantic and touching comedy .

In all seriousness, while the environment is certainly not boring our story remains unchanged and our teams continue to execute to win driving results above expectations and the most consistent and boring manner possible. Despite the well documented headwinds we are all facing every day.

Speaker #3: The Hitman's Bodyguard . When describing his job , boring is always best . I have heard from many of you and appreciate all of the movie quotes , suggestions that you have all sent over the last year .

And with that let me start off with total company results.

We drove five 6% core sales growth in the quarter, driven primarily by the ongoing strength within aerospace <unk> electronics.

Speaker #3: So feel free to send me your best thoughts on lines in the future that tie to Crane . In your view , and anyone suggesting a quote that we actually use on a call will receive a free Crane coffee mug autographed by me .

Adjusted operating profit increased 19% driven by continued strong net price.

Net price and solid productivity.

In the quarter core FX neutral backlog was up 16% compared to last year, reflecting continued strength at aerospace and electronics and core FX neutral orders were up 2%.

Speaker #3: In all seriousness, while the environment is certainly not boring, our story remains unchanged and our teams continue to execute to win.

Speaker #3: Driving results above expectations in the most consistent and boring manner possible . Despite the well-documented headwinds , we are all facing every day .

From a balance sheet perspective, while we are in a net positive cash position at the end of the quarter, we completed financing with our bank partners for our pending acquisition of PS side.

Speaker #3: And with that , let me start off with total company results . We drove 5.6% core sales growth in the quarter , driven primarily by the ongoing strength within aerospace and electronics .

We entered into a credit agreement that included a $900 million delayed draw term loan and a $900 million revolving credit facility.

Speaker #3: Adjusted operating profit increased 19% , driven by continued strong net price of net price and solid productivity in the quarter . Core FX neutral backlog was up 16% compared to last year , reflecting continued strength at aerospace and electronics and core FX neutral orders were up 2% from a balance sheet perspective .

Both maturing on September 32030.

We expect to finance Tsi, primarily with the proceeds of the term loan and cash on hand, leaving the $900 million revolving credit facility available for further M&A and normal working capital management.

And consistent with our prior commentary after the PSA transaction, our net leverage will be just over one times still well below our two to three times targeted range, leaving us well positioned for further M&A.

Speaker #3: While we are in a positive cash position at the end of the quarter , we completed financing with our bank partners for our pending acquisition of Sci .

Speaker #3: We entered into a credit agreement that included a $900 million delayed draw term loan and a $900 million revolving credit facility . Both maturing on September 30th , 2030 .

With respect to tariffs we continue to expect the gross cost increase to be roughly $30 million for the year <unk>.

Inclusive of the impact of the section 232 tariffs so no change there and as we said last quarter, we expect to offset tariff impacts through pricing productivity.

Speaker #3: We expect to finance Sci primarily with the proceeds of the term loan and cash on hand , leaving the 900 million revolving credit facility available for further M&A and normal capital management and consistent with our prior commentary after the Sci transaction , our net leverage will be just over one times .

And our teams are prepared to react appropriately to any further changes that may occur in this dynamic area.

A few more details on the segments in the quarter.

Starting with aerospace <unk> electronics sales of $270 million increased 13% in the quarter nearly nearly all of that organic growth.

Speaker #3: Still well below our 2 to 3 times targeted range , leaving us well positioned for further M&A . With respect to tariffs . We continue to expect the gross cost increase to be roughly 30 million for the year , inclusive of the impact of the section 232 tariffs .

And even with the continued high level of core sales growth our record backlog of just over $1 billion.

Up 27% year over year was up slightly sequentially.

Speaker #3: So no change there . And as we said last quarter , we expect to offset tariff impacts through price and productivity . And our teams are prepared to react appropriately to any further changes that may occur in this dynamic area .

Core orders were up 5% in line with our expectations as some orders that we anticipated later in the year were received in the first half.

Again, no surprises and continued strong demand broadly.

Total aftermarket sales increased 20% with commercial aftermarket up 23% and military aftermarket up 12%.

Speaker #3: A few more details on the segments in the quarter, starting with aerospace and electronics sales of $270 million, which increased 13% in the quarter.

And OEM sales increased 10% in the quarter with both commercial and military up 10%.

Speaker #3: Nearly nearly all of that organic growth . And even with the continued high level of core sales growth , our record backlog of just over 1 billion , up 27% year over year , was up slightly sequentially .

Adjusted segment margin of 25, 1% expanded 160 basis points from 23, 5% last year.

Speaker #3: Court orders were up 5% in line with our expectations , as some orders that we anticipated later in the year were received in the first half .

Primarily reflecting strong net price solid productivity and the impact from the higher volumes.

We expect operating margin to be modestly lower than Q4, due to typical seasonality and less favorable mix between commercial OE and aftermarket.

Speaker #3: Again , no surprises and continued strong demand broadly , total aftermarket sales increased 20% with commercial aftermarket up 23% and military Aftermarket up 12% and OEM sales increased 10% in the quarter , with both commercial and military up 10% .

Our process flow technologies in.

In Q3, we delivered sales of $319 million up 3% with flat core performance in the quarter, along with a one 6% benefit from the <unk> acquisition and one five points of favorable foreign exchange.

Speaker #3: Adjusted segment margin of 25.1% , expanded 160 basis points from 23.5% last year , primarily reflecting strong net price , solid productivity and the impact from the higher volumes we expect operating margin to be modestly lower in Q4 due to typical seasonality and less favorable mix between commercial OE and aftermarket at process flow technologies .

Compared to the prior year.

Core FX neutral backlog decreased 5% and core FX neutral orders were down slightly as expected.

Adjusted operating margin of 22, 4% expanded again and in the quarter was 60 basis points higher than last year, driven by strong productivity mix.

Mix and net price inclusive of tariff headwinds.

Speaker #3: In Q3 , we delivered sales of 319 million , up 3% with flat core performance in the quarter , along with a 1.6% benefit from the acquisition and one and a half points of favorable foreign exchange compared to the prior year .

Moving to guidance there were a couple of non operational changes both the segments.

We now expect corporate expense of $85 million modestly above our prior view of $80 million during due primarily to M&A activity. We also now anticipate net nonoperating income to be closer to $7 million up from $4 million due to higher investment income on our cash balances and a quick reminder, that this nonoperating income.

Speaker #3: Core FX neutral backlog decreased 5% , and core FX neutral orders were down slightly . As expected , adjusted operating margin of 22.4% expanded again , and in the quarter was 60 basis points higher than last year , driven by strong productivity mix and net price , inclusive of tariff headwinds in the quarter .

Also includes about $9 million of business interruption insurance recovery recorded in other income expense related to hurricane Helene around $6 7 million of which has been recognized year to date and with $2 7 million in the quarter.

Speaker #3: Moving to guidance , there were a couple of non-operational changes below the segments . We now expect corporate expense of 85 million , modestly above our prior view of 80 million , due primarily to M&A activity .

And last our tax rate for the full year will be slightly lower with us now estimating a 23% tax rate for the full year versus our prior estimate of 23, 5%.

Speaker #3: We also now anticipate net non-operating income to be closer to 7 million , up from 4 million due to higher investment income on our cash balances .

Those three non operational items net to a very slight benefit of about one penny with the other 19 of the guidance increase at the midpoint coming from the segments.

Speaker #3: And a quick reminder that this non-operating income also includes about 9 million of business interruption insurance recovery recorded in other income expense related to Hurricane Helene , around 6.7 million of which has been recognized year to date .

Operationally, we didn't change the full year core growth guidance range of 4% to 6%, but we now expect to be in the upper half of that range given the strength at aerospace <unk> electronics.

Speaker #3: And with 2.7 million in the quarter and last , our tax rate for the full year will be slightly lower , with us now estimating a 23% tax rate for the full year versus our prior estimate of 23.5% .

And that growth should leverage at our normal rates on a full year basis.

So given our excellent results to date and our current view on Q4, we are raising adjusted EPS guidance by <unk> 20 at the midpoint and narrowing the range to be within $5 75 to $5 95.

Speaker #3: Those three non-operational items , net to a very slight benefit of about one penny , with the other $0.19 of the guidance increase at the midpoint coming from the segments .

Again, reflecting 20% growth year over year at the midpoint.

Overall, another outstanding quarter, another outstanding year against a very dynamic macro backdrop.

Speaker #3: Operationally, we didn't change the full-year core growth guidance range of 4% to 6%, but we now expect to be in the upper half of that range.

And with that operator, we are now ready to take our first question.

Thanks, Laurie is now open for questions.

Speaker #3: Given the strength that aerospace and electronics and that growth should leverage at our normal rates on a full year basis . So given our excellent results to date and our current view on Q4 , we are raising adjusted EPs guidance by $0.20 at the midpoint and narrowing the range to be within 5.75 to 5.95 .

This time, if you have a question or comment please press star one on your telephone keypad.

If at any point. Your question is answered you may remove yourself from the queue by pressing star Kim.

Again, we ask that you pick up your handset when posing your questions to provide optimal sound quality.

Speaker #3: Again reflecting 20% growth year over year . At the midpoint . Overall , another outstanding quarter , another outstanding year against a very dynamic macro backdrop .

Thank you.

Our first question is coming from Matt Summerville with D. A Davidson. Please go ahead your line is open.

Okay, Matt couple.

Speaker #3: And with that operator , we are now ready to take our first question .

<unk>.

A couple of questions first on PFT can you talk about <unk>.

Speaker #1: Nicholas , now open for questions at this time . If you have a question or comment , please press star one on your telephone keypad .

Expectation is that the business is up organically low single digits for the year.

If you look at the non chemical portion of PMT, how does that look relative to that low single digit number and then on the chemical side.

Speaker #1: If at any point your question is answered , you may remove yourself from the queue by pressing star two . Again , we ask that you pick up your handset when posting your questions to provide optimal sound quality .

What specifically you expect out of that end market this year and maybe how you're thinking about that exposure, which is fairly large for the segment.

Speaker #1: Thank you . Our first question is coming from Matt Summerville with D.A. Davidson . Please go ahead . Your line is open .

Say, an $80 <unk> typo overlay and then I have a follow up.

Speaker #4: Thanks . A couple of good morning . A couple of questions . First on on FTX . Can you talk about , you know , if the expectation is that the business is up organically , low single digits for the year , if you look at the non-chemical portion of FTX , how does that look relative to that low single digit number ?

Yes, Matt. Thank you, Alex so just to frame up the markets and what we're seeing in responding to your question.

I think reasonably different than by markets as different as a reminder were and PFT primarily.

Almost half or a little bit over half on America's base business, which is a positive in this environment.

Speaker #4: And then on the chemical side , you know what specifically you expect out of that , that end market this year and and maybe how you're thinking about that exposure , which is fairly large for the segment through , say , an 80 over 20 type of overlay .

So first speaking to the non chemical markets.

Wastewater for example.

North America base, we're seeing double digit growth in that business driven by the investment in the aging infrastructure of environmental.

Speaker #4: And then I have a follow up .

Speaker #3: Yeah . Matt . Thank you . This is Alex . So just to frame up the markets and what we're seeing in responding to your question , just , you know , I think regionally it's different than my markets .

It's been strong we expect that to continue to be strong going into next year cryogenics through our new acquisitions in various applications semiconductors electronics and space launch I mentioned last quarter, just driven by the commercial aerospace market of launch and we put.

Speaker #3: It's different . So reminder we're in FTX primarily on more almost half or a little bit over half on Americas base business which is a positive in this environment .

Speaker #3: So first speaking to the non-chemical markets , you know , wastewater , for example , North America based , we're seeing double digit growth in that business driven by just investment in the aging infrastructure , environmental .

Dissipate and the platforms and the Buildout of platforms that's been growing.

Also double digit and we're gaining significant share as well as recently visited with the team there and they were highlighting there.

The commercial excellence in the front end, where they have a tablet now and they are onsite variable sketch.

Speaker #3: So that's been strong . We expect that to continue to be strong going into next year . Cryogenics through our new acquisitions and various applications , semiconductors , electronics and space launch I mentioned last quarter just driven by that commercial aerospace market of launch .

Project converted into a drawing with this application center into the front end and really reduce the lead time to as important to our customers so doing very well.

It also highlight pharma in particular in North America strong growth. There. This year. We are seeing this re shoring activity happening in North America, we expect that to continue in the U S.

Speaker #3: And we participate in the platforms and the build out of platforms that's been growing also double digits and we're gaining significant share as well .

Big project that we won with a key customer related to the DLP, one drug as our expanding and producing in the U S. We expect more of those investments to happen and also.

Speaker #3: Just recently visited with the team there, and they're highlighting their commercial excellence in the front end, where they have a tablet now and they're on site.

Speaker #3: They're able to sketch the project , convert it into a drawing with this application , send it into the front end , and really reduce the lead time , which is important to our customers .

Empower very north American based.

Driven just by that demand empower that everybody knows about AI data centers.

Speaker #3: So doing very well . Also highlight pharma in particular in North America , strong growth there this year . We are seeing this reshoring activity happening in North America .

So those are all the non chemical markets that are highlight that are positive and we continue to see positive going into next year.

When we think about chemical also varying by region.

Speaker #3: We expect that to continue in the US . Big project that we won with a key customer related to the GLP one drug , as they're expanding and producing in the US , we expect more of those investments to happen .

So North America, we've seen.

Some good projects this year.

Good activity on expansions.

Activity.

Minder in Americas has the advantage of this feedstock.

Speaker #3: And also in power, very North American based, driven just by the demand and power that everybody knows about AI data centers.

Cost of Venezuela, even though there is.

Capacity globally customers have advantaged to investing in the U S and expanding and getting more output. So.

Speaker #3: So those are all the non-chemical markets that will that are positive . And we continue to see positive going into next year . When we think about chemical , also varying by region .

That's moving in a positive way and also middle East those are the two markets that were highlights and chemical.

That have been positive and then softer.

Europe, and China as well.

Speaker #3: So North America , we've seen some good projects this year , good activity on expansions , productivity . A reminder in Americas has the advantage of this feedstock and cost advantage .

I've been down.

As far as our exposure in chemical how we think about it to answer your question. Your second part of your question.

The chemical market is a lot of things that we like.

Speaker #3: So even though there's capacity globally , customers have advantage to investing in the US and expanding and getting more output . So that's moving in a positive way .

The applications that we play very critical corrosive toxic abrasive applications that gave us an opportunity to differentiate add value.

For our customers and.

Speaker #3: And also Middle East , those are the two markets I would highlight in chemical . That have been positive . And then softer .

So we like that.

Obviously, the cyclicality of the market, sometimes as a challenge so as you know over the last.

Speaker #3: Europe and China as well . Have been down as far as our exposure in chemical . How we about it . To answer your question , your second part of your question , look , the chemical market , there's a lot of things that we like in the applications that we play .

A decade, we've worked to reshape the portfolio investing in cryogenic organically Inorganically wastewater and we will continue to do so.

Highlighting our recent <unk> acquisition as well in the markets where they play.

Speaker #3: Very critical , corrosive , toxic , abrasive applications that give us an opportunity to differentiate , add value for our customers and so we like that .

And nuclear and aerospace.

Our differentiated technology also wastewater so we'll continue to invest in these higher growth markets, but maintain our current presence in chemical and keep building on that and overall, we will continue to save that underlining.

Speaker #3: Obviously , the cyclicality of the market sometimes is a challenge . So as you know , over the last decade , we've worked to reshape the portfolio , investing think in cryogenics organically and organically .

Growth in our PST segment.

Thanks for all that color, Alex and then.

Speaker #3: Wastewater . And we will continue to do so , highlighting our recent Sci acquisition as well in the markets where they play in nuclear and aerospace , differentiated technology .

Just another one on PMT the margin upside you saw in the quarter can you maybe help parse out what the key drivers of that upside may have been whether it be price cost mix or.

Speaker #3: Also wastewater . So we'll continue to invest in these higher growth markets . But maintain our current presence in chemical and keep building on that .

Or just cost outs and then how we should be thinking about those various levers at a high level as we think about next year.

Yes, so as we think about PST the journey, we've been on for the last decade.

Speaker #3: Overall, we'll continue to shape that, underlining growth in our ST segment.

Growing and delivering more than 100 basis points of close to 100 basis points on average will be driven by several factors. One is our continued innovation and new product launches.

Speaker #4: Thanks for all that color , Alex . And then just another one on FTX . The margin upside you saw in the quarter .

Speaker #4: Can you maybe help parse out what what the key drivers of that upside may have been , whether it be price cost mix or or just cost outs .

That we've highlighted in the past our new product sales keeps growing as a percent of our portfolio of the new products are in these target markets more differentiated and we're able to have higher margin because of that and then we're driving commercial excellence.

Speaker #4: And then how we should be thinking about those various levers at a high level , as we think about next year . Thank you .

Speaker #3: Yeah . So as we think about FTX , the journey we've we've been on , right , for the last decade , growing and delivering more than 100 basis points or close to 100 basis points on average , really driven by several factors .

Value pricing standing up for the technology and the problems, we're solving for our customers and third disposition, our relentless focus on operational excellence and waste elimination, which is which is of course. So I think I would highlight those three elements I think what's different in this environment is.

Speaker #3: One is our continued innovation. New product launches that we've highlighted in the past are driving new product sales, which keeps growing as a percent of our portfolio.

This tariff dynamic, which ive been very very pleased with how the teams have been able to manage that through both price and supply chain, which I think it is.

Speaker #3: The new products are in these target markets more differentiated , and we're able to have higher margin because of that . And then we're driving commercial excellence , value pricing , standing up for , you know , the technology and the problems we're solving for our customers .

A real differentiator for us to be able to do that and not only maintain but expand our margins. Even in this environment speaks to the quality of our portfolio and the quality of execution from our teams.

Speaker #3: And third , this traditional relentless focus on operational excellence and waste elimination , which is which is core . So I think I would highlight those those three elements .

Great. Thanks, Alex.

Speaker #3: I think what's different in this environment is , you know , this tariff dynamic , which I've been very , very pleased with how the teams have been able to manage that through both price and supply chain , which I think is the real differentiator for us to be able to to do that .

Thank you.

Our next question comes from Justin <unk> with CJS Securities. Please go ahead.

I am wondering on.

Hey, Joseph.

I was hoping you'd mentioned in PFG some.

Softness in chemicals, but just wondering if you could comment maybe youre seeing signs of.

Speaker #3: And not only maintain , but expand our margins even in this environment . That speaks to the quality of our portfolio and the quality of execution from our teams .

Ongoing stabilization or maybe a return to growth just trying to get a sense of when that might rebound.

Speaker #4: Great. Thanks, Alex.

Yes, so we're definitely seeing it stable throughout the year in the first half we had some big Big project.

Speaker #1: Thank you. Our next question comes from Justin Edges with CJS Securities. Please go ahead.

Our projects continue to move more so in the middle East and North America.

Speaker #5: Hi . Good morning . All .

Speaker #3: Hey , Justin .

Speaker #5: I was hoping, you know, you mentioned in FTX some softness in chemicals, but I was just wondering if you could comment. Maybe you're seeing signs of an ongoing stabilization, or maybe, you know, a return to growth.

Crow globally has been stable throughout the year.

That's been a big big part of our success, so definitely no signs of deterioration stability.

And as a matter of when this will start recovering at some point we expect the.

Speaker #5: Just trying to , you know , get a sense of when that might rebound .

Next year for chemical but.

Speaker #3: Yeah . So definitely seeing it stable right through throughout the year in the first half we we hit some big , big projects .

No clear inflection, yet, but stable and expected to improve next year.

As I think about.

What's taking place globally.

Speaker #3: Projects continue to move more . So in Middle East and North America , MRO globally has been stable throughout the year . So that's been a big , big part of our success .

<unk>.

And everyone else has had to react to.

Changes in the <unk>.

Tariff structure another other news that happens on a daily basis, but.

Speaker #3: So, definitely no signs of deterioration; stability. And it's just a matter of when this will start recovering. At some point, we expect next year for chemical.

Again pleased with how we continue to stay.

Very agile to react as appropriate and one that I mean within our control are incredibly proud of what we continue to drive within our control if I look at the broader market.

Speaker #3: But you know , no clear inflection yet . But stable and expect it to improve next year . Justin , as I think about what's taking place globally and we've and everyone else has had to react to .

I'm more on the bullish and just generally because I believe that.

While there is a lot of noise right now that we're all having to deal with.

I believe that this will be settling out here.

Speaker #3: Changes in the tariff structure and other news that happens on a daily basis. But again, I am pleased with how we continue to stay.

Towards the end of the year into next.

Just my own reading of the tea leaves.

The administration's approach and.

Im more optimistic and planning around it for our teams in terms of what that means.

Speaker #3: Very agile to react as appropriate . I'm one that I mean within our control and incredibly proud of what we continue to drive within our control .

It's still early days, we have our plan.

Meetings coming up here in the month of November to really kind of locked in.

Speaker #3: If I look at the broader market, I’m more on the bullish end, just generally, because I believe that while there’s a lot of noise right now that we’re all having to deal with, I believe that this will be settling out here towards the end of the year into next.

It means for 246, but.

I'm more optimistic of where all this shakes out and then what that means for.

For the broader.

Global economy.

So what that's my opinion.

Speaker #3: Just just my own reading of the tea leaves and the administration's approach . And I'm more optimistic and planning around it for our teams in terms of what that means .

Worth anything more than anyone else is going to.

That's worth a lot and I appreciate the answers and then switching to.

<unk> Tsi just back of the envelope there.

Margins.

A little bit under Crane. So can you just talk about.

Speaker #3: It's still early days . We have our plan meetings coming up here in the month of November to really kind of lock in what it means for 2026 , but I'm more optimistic of where all this shakes out and then what that means for the broader global economy .

<unk>, the crane business system or the machine to GSI, and what you're expecting to see a margin improvement once you've integrated them.

Yes, Tim this is Alex so we haven't closed.

The business that we close the deal like that the January one so.

We will provide more details after but generally speaking.

Speaker #3: For what that's worth , my opinion is not not worth anything more than anyone else's . But .

These these businesses have incredible technology very stable aftermarket, we expect these businesses to become one of our best.

Speaker #5: That's worth a lot . I appreciate the answers . And then switching to the Cy just back of the envelope there margins , you know , a little bit under Crane .

Speaker #5: So can you just talk about applying the Crane business system or the machine to PSI and what you're expecting to see in margin improvements once you've integrated them ?

Businesses within claim from a margin and.

Gross standpoint in our portfolio and the improvements that will drive.

Speaker #3: Yeah , this is Alex . So we haven't closed the business yet . We haven't closed the deal . Expect that on January 1st .

Are not different than what we've been able to do in particular in the PFT side through driving overall CBS. So.

Speaker #3: So we'll provide more more details after . But generally speaking you know these these businesses have incredible technology , very stable aftermarket . We expect these businesses to become one of our best businesses within Crane from a margin and growth standpoint in our portfolio and the the improvements that will drive are not different than what we've been able to do in particularly in the Ft side through driving .

This will become accretive to our profile over the years they have all of the fundamentals.

<unk>.

Speak.

Into more detail of how the different elements will play out or how are we still in play out with the coming year, but I can tell you I'm very very confident.

We will deliver with this acquisition very pleased with everything I'm seeing.

Our preparation fixing it.

Alright, thanks for taking the time.

Thank you.

Speaker #3: Overall , CBS so these will become accretive to our profile over the years . They have all the fundamentals . And you know .

Thank you.

We will move next to Greg Damian Karas with UBS. Please go ahead.

Speaker #3: Speak into more detail of how the different elements will play out or how we see them play out with the coming year . But I can tell you , I'm very , very confident that we will deliver with this acquisition .

Hey, good morning, everyone. Congrats on the progress.

How are you thinking.

Hey, Bill Thank you.

So I wanted to ask a follow up question related to margins.

And particularly our guidance for the year.

It seems like it.

I'm thinking in a step down in fourth quarter margins definitely a notable break from the strength you've been exhibiting so far.

First three quarters of the year and I think even on a year over year basis.

The incremental margin is.

Definitely well below kind of 35% to 40% plus you guys.

Aspire <unk> itself can you just maybe provide a little bit more color around that margin expectation for the fourth quarter.

Moving pieces there.

Yes sure.

Damian this is rich.

Primary.

Area would be similar to what we talked about the last couple of quarters.

With respect to the year over year headwinds that we're going to see in commercial aftermarket.

Aftermarket now admittedly say that we actually had a little bit of a better quarter here in Q3, and so we didn't see as much of that headwind.

We do expect that in the fourth in the fourth quarter.

A couple of items that I would point to is that we did see a few.

Initial provisioning orders that we benefited from in Q3.

Sure.

A decent claim recovery. So we did see a few things that did benefit us here in the quarter.

And then but I would also say is two other things one we're continuing to see that OE build rates continue.

And so thats a natural mix.

No.

Unfavorable mix element, although we are excited about it.

And then the second item would be when you look at the <unk>.

Fourth quarter, we tend to have lower production hours. So there's a little bit of seasonality in what we would typically exhibit in the fourth quarter. They now all that said I would tell you that on a full year basis, we're going to probably be at the higher end of our targeted leverage range for A&D and will exceed at PFT. So.

Yes, we had a great nine months, we still expect a great fourth quarter, but it'll be a little bit more muted for those reasons.

Understood that's really helpful.

And then sorry, if I missed any comments related its earlier kind of hopping around a bunch of calls today, but.

Would you guys.

Give us your thoughts on the U S government shutdown are you seeing or expecting any impact from that.

Kind of thinking about that should should that continue into the extended future.

Yes, I mean right now we don't it's not impacting us today.

So the.

The things that we would look to our.

Paying bills and things like that and we've got no signals of that at all so.

So far so good in terms of any impacts to train at this point Theres nothing on the horizon that would suggest any impact to us here, even as we get into the first quarter.

Okay, great. Thanks, guys. Good luck. Thanks.

Thanks, David.

Thank you.

Our next question comes from Scott <unk> with Deutsche Bank. Please go ahead. Your line is open.

Well, Scott Hey, Good morning, Alex you mentioned in power in data center demand as being a sort of market for PFG. In response to Matt's question I think I guess can you share a bit more detail there on what youre seeing in that market and how it's benefiting crane.

Yeah for sure so power, primarily U S based for us less than 10% really our portfolio and PFT. We've been in this business for a very long long time.

With our valve portfolio primarily.

And what we're seeing is these power demand that is well documented and the investment in combined cycle natural gas combined cycle plant.

Around the.

The country I think.

This year there is more than.

Close to 30 power plants are moving forward.

So we see content there natural combined cycle plants are still a very economic.

Ways to produce electricity very reliable and as you know abundance of natural gas in the United States So that.

That is our participation there.

With our valve portfolio and we expect that to continue into next year funnel has been increasing projects euro.

<unk> has been increasing I think they can't build them fast enough basically on the natural gas side.

Do you have any content on smaller reciprocating engines like those that caterpillar mix.

No no no we don't have confidence in that.

Okay, and then Max are you investing organically at PMT to increase your ship set content on the 81000, obviously some some big news out. This morning I was curious if that could maybe be a bigger driver will evolve and your historical content suggested yeah. Thanks, Scott. So you could argue that the border Stokes and long term is absolutely aimed at gaining content.

On the AP 1000.

Team is already underway with.

Technology investments to penetrate the pressurized water reactor in addition to boiling water.

So long long term absolutely.

As we continue the current team is doing a phenomenal job has done as we have when we first one AP 1000 content. Many many years ago to the tune of about $10 million.

Per ship set.

We're identifying another 30.

A 30% increase in content right now that we are bidding on capturing additional share gains also so both organically as well as inorganically as we move forward for sure.

And that was an exciting announcement today, an exciting announcement that.

I think in addition to just the announcement today related to the 80 billion investment.

Operator: At this time, all participants have been placed on a listen-only mode, and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star one on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star two. To ensure others can hear your questions clearly, we ask that you pick up your headset for best sound quality. Lastly, if you should require operator assistance, please press star zero. I would now like to turn the call over to Allison Poliniak, Vice President of Investor Relations.

The government announced support.

You're seeing this change over time that will continue this trend of.

Nuclear as part of a broader <unk>.

Global solution.

To clean and efficient power that will.

Continue to bode well for us and our position also.

Thank you.

Thanks Scott.

Thank you.

Our next question comes from Nathan Jones with Stifel. Please go ahead.

Morning, Nathan.

Is there a nathan.

Allison Poliniak: Thank you, Operator, and good day, everyone. Welcome to our third quarter 2025 earnings release conference call. I'm Allison Poliniak, Vice President of Investor Relations. On our call this morning, we have Max Mitchell, our Chairman, President, and Chief Executive Officer; Alejandro Alcala, Executive Vice President and Chief Operating Officer; and Richard Maue, our Executive Vice President and Chief Financial Officer, along with Jason Feldman, Senior Vice President, Treasury, Tax, and Investor Relations, who is on for Q&A. We will start off our call with a few prepared remarks from Max, Alejandro, and Richard, after which we will respond to your questions. Just a reminder, the comments we make on this call will include some forward-looking statements. We refer you to the cautionary language at the bottom of our earnings release and also in our annual report, 10-K, and subsequent filings pertaining to forward-looking statements.

Nathan Your line is open please check your mute.

Okay, sorry, guys technical failure on my end.

Morning, everyone there.

Good morning.

Finding it a bit hard to concentrate we should promise of assigned rich maue train coffee.

Again thank.

Thank you for it.

Yeah.

I guess just.

Another question on debt Tsi business is match you one of the comments you made was that you from a strategic perspective.

Our ball bullish on that business that you three months ago, maybe you could just talk a little bit more about what you've learned in the last three months.

It makes you strategically more positive on the outlook for that business.

Well I'll, let Alex chime in as well, but it starts with the team itself and I think we just continue to be impressed with the caliber of the talent.

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

<unk>.

It's going to be joining crane, I, just love the openness and transparency.

We've been met with to date.

Feels really good in terms of integration integration planning working well together.

Max Mitchell: Thank you, Allison, and thanks everyone for joining the call today. We are proud to report another strong quarter with results coming in ahead of our expectations. Adjusted EPS was $1.64, driven by an impressive 5.6% core sales growth, primarily reflecting broad-based strength in Aerospace & Electronics and continued strong execution at Process Flow Technologies. This quarter's results, yet again, underscore our differentiated technologies and operational discipline. In addition to our continued long-term investments in new technology and solutions, the Crane Business System, the machine that we described in great detail at our March Investor Day, combined with our unique culture, enables our teams to adapt to the many unforeseen events that we're all facing every day and deliver on the results.

It's what I know is taking place already this is not a team that has stood still.

<unk> been investing for growth and we're going to get quickly get aligned strategically as we're moving forward.

All feels very very positive from that standpoint.

Sharing of data kind of getting clarity strategically on what we're going to be working on together from day one.

This is a fantastic relationship what else would you highlight Alex Yes, I think over these months Nathan.

It's just getting more clarity on the specifics of how we're going to collaborate and work together.

The detailed plans and the opportunity is just having a very clear line of sight.

To the gains.

Starting with aerospace.

Drug and the nuclear.

Also with panel metrics.

And just the level of detail that we have been able to get and the plans of where we are going to prioritize and we're going to where we're going to be able to have.

Max Mitchell: Our pending acquisition of Precision Sensors & Instrumentation from Baker Hughes remains on track to close at year-end, and our strategic outlook for these businesses has only improved over the last three months. Many work streams are already well underway to ensure a seamless integration and create shareholder value starting day one. Our balance sheet remains very strong. Our pipeline of acquisitions remains robust, and we remain very active on the M&A front. There is a tremendous amount of momentum and continued innovation happening at Crane that Alejandro Alcala will cover off. As we exit 2025, we are once again raising but also narrowing our full-year adjusted earnings outlook to a range of $5.75 to $5.95 from our prior view of $5.50 to $5.80, given our backlog, consistent execution, and year-to-date performance.

Great gains gives us higher confidence where we were.

Three months ago. So it just keeps increasing those clients get more defined and more details.

Youre clarifying.

And I guess I'll just ask a broader question about 2026, you guys have always been pretty willing to share your outlook.

I mean are.

You're obviously going to get towards the top end.

The growth 46% growth target. This year, we have seen organic growth slowed down a bit as we've gone through the year, maybe you could just talk about do you think.

Inquiry in the 4% to 6% range next year.

Maybe it'll be a little more towards the middle of next year or just any thoughts you have on how that growth outlook might shake out for next year.

Well, it's still early days, we've got a plan meetings coming up.

<unk>.

Theres a lot too.

Monitor here in the fourth quarter.

Max Mitchell: That reflects 20% adjusted EPS growth at the midpoint compared to 2024, another outstanding year for Crane and our shareholders. As we look to 2026, our consistent investment thesis remains firm. The strength of our underlying business, our strategy, and our capabilities in both operational execution and commercial excellence support our 4% to 6% organic growth assumptions, leveraging on average of 35% into next year. We will provide greater detail on 2026 expectations, as well as PSI in early January once we officially close on the acquisition. Now let me pass it over to our Chief Operating Officer, Mr. Alejandro Alcala, to provide some color on the current environment and segment performance.

Having said all of that based on what I know today based on what we feel today based on.

Thinking through the end markets and how that will continue to play out.

It still feels like our investment thesis holds into next year Nathan from that standpoint.

Okay, I guess, we'll wait for their full can you update thank you very much for taking my questions.

Thanks Nathan.

Thank you.

Our next question comes from Jordan <unk> with Bank of America. Please go ahead. Your line is open.

Hey, good morning Julien.

Thanks.

Defense and Aero, how should we think about the opportunity for you guys to start to see announcements for FX ex Cta down selection some of the larger group toward five drones.

That have been.

Previewed.

Alejandro Alcala: Thanks, Max. First, let me comment on the pending acquisition of Precision Sensors & Instrumentation. As Max said, the acquisition remains on track to close January 1, and the integration planning is well underway and progressing smoothly with the existing Baker Hughes and Crane teams. As you would expect, my team and I, as well as the Precision Sensors & Instrumentation leadership, have been intimate with all closing details and integration planning to accelerate strategic execution in 2026. As we discussed last quarter, each brand will contribute a robust and complementary technology, further strengthening the Crane portfolio. Combined with the power of the Crane Business System, Precision Sensors & Instrumentation will be accretive to our financial profile, both margins and growth within the next few years.

Yes, Jordan this is Alex.

On the <unk> or the <unk>.

<unk> platforms, we are very well positioned on all of the demonstrators really.

So we've been successful in having multiple horses in the race so.

We're going to see strong benefit from that on the CCA activity I think we've mentioned we've already secured a position with one of the leading emerging players.

And that space with TCA, which is <unk>.

Start ramping up here in the years to come and then in general and drones right. We're actively involved overall I think as you know theres a wide range of drones that exist from the small battery powered hand launched.

Alejandro Alcala: Our confidence in what we'll deliver has only increased as we work closely with the Precision Sensors & Instrumentation team on a daily basis, planning for day one. In terms of further M&A, our funnel of opportunities remains full. The deals we are working on today include opportunities in both Aerospace & Electronics, as well as Process Flow Technologies. Most range in deal size purchase price from $100 million to $500 million. Now, some thoughts on the segments in the quarter, starting with Aerospace & Electronics. Aerospace and defense markets remain very strong. The backlog we built and new programs and opportunities our teams have won provide strong visibility into 2026 and beyond. On the commercial side of the business, activity remains healthy with Boeing and Airbus continuing to ramp up production and aftermarket activity continuing to have elevated levels.

Those that are call it switchblade or Phoenix.

We do not participate in that small where we do play is on the medium or larger drones.

That are part of that CCA like those ADC called out like PRA Global Hawk creditor.

So.

We're well positioned there with various solutions and we expect to benefit that as that market continues to grow.

Got it and then two on how strong demand has been book to Bill.

Especially electronics how are you guys thinking about the current capacity you have in place to meet that demand.

Okay.

As far as capacity, where we've been we're well prepared to meet that demand and the ramp up rates of the Oems both Airbus.

Airbus and Boeing I think things have done a really nice job preparing for that even.

<unk> taken advantage of preparing inventory buffers to execute at a very high level of support those ramp rates, so quite confident in our ability to support.

Got it thank you guys. Thank.

Thank you Julien.

Thank you.

Alejandro Alcala: On the defense side, we continue to see solid procurement spending and a continued focus on reinforcing the product defense industrial base, given heightened global uncertainty today. Looking ahead to the balance of 2025, we now anticipate core sales growth for the year to be up low double digits compared to our prior view for core growth to be up single digits to low double digits. That growth will be leveraged at 35% to 40% for the full year. Our guidance assumes growing year-over-year OE sales, partially offset by decelerating year-over-year growth rates in commercial aftermarket in Q4 that we previously highlighted. Overall, a really outstanding year. We also continue to win new business and pursue new opportunities across the sites. That gives us confidence that we will continue to see above-market growth for the remainder of this decade. Let me highlight a few examples.

Our next question comes from Tony Bancroft with Gabelli funds. Please go ahead. Your line is open.

Good morning, Gents, Hey, good morning, Gents, congratulations on the great quarter and all your great work.

I recently surety.

A new facility.

It's pretty overwhelmed by the amount of automation that was going into it.

And I just got to get your view on sort of automation and you've talked a lot about you gave a lot of.

Backlog growing.

Yes.

Universal side. It sounds like you are ready to go with.

Capacity, but it sounds like there's a lot of growth on both sides of the businesses and in other areas, obviously things like Golden Dome and all of that maybe you can just talk about how you view automation the long term.

That gets you maybe.

Margin basis, and then just maybe overall ability to grow to grow faster.

I'll take a stab and then have Alex says everything else look we've always looked at.

Enhancing productivity easing the work by trying to air proof.

Alejandro Alcala: First, Crane continues to win funded next-generation military demonstrator programs for our brake control systems for both fixed and rotary wing platforms. Second, we continue to advance our vehicle electrification solutions, heightened by the launch of our new 200-kilowatt traction motor inverter generator controller product at the Association of the United States Army, or AUSA, trade show in October. We remain actively engaged with defense vehicle OEMs regarding collaboration on the common tactical truck and new combat vehicle programs. Related to this, I would comment that over the past two years, customer vehicle development efforts were fragmented with numerous concepts in play and uncertainty around government funding. This year at AUSA, however, the landscape was noticeably different. The focus was clear. Industry attention is now centered on competing for the XM30 and the CTT. This shift aligns precisely with the strategic direction we've defined for our defense power business.

<unk>.

Takeout cycle time, what's manual how can we automate we have a lot of success with co bots across the organization on a localized level.

I would completely honest Tony I'm not sure what the technology is that you saw what type of facility.

There are certain technologies that just more of it themselves to the complete automation from start to finish.

And that level of investment.

There is no one claims site that I can think of that would have that type of vision.

We'll continue to be while automation is clearly.

Yes.

A direction that will go down it tends to be very spot based and specific to very specific tasks that continue to pick it up variation overburden on our on our associates.

At some point in the future do you link.

Work centers to begin to get flow cells that flow.

The human element for us will always be.

<unk> in the near future with the type of work that we do across the organization. So.

I see it as part of the broader strat.

Strategy for Us Holistically and as we drive productivity on a number of fronts.

Alejandro Alcala: With government funding priorities now well established, vehicle primes are concentrating their efforts almost exclusively on winning these programs. Very exciting for us. Last, activity around air defense systems remains very robust. Golden Dome is still being defined by the DOD. However, we strongly believe we will benefit directly to existing positions held today on systems like LTAMS, radar system, and Patriot missile programs, among others that will most certainly be part of Golden Dome's solution, let alone pure increased demand drivers. We also anticipate additional growth from new emerging opportunities that our technology is well-suited for, specifically in the scaling and upgrades of radar, counter unmanned aerial systems, high-power energy, and space-based assets for Golden Dome. With a record backlog and pipeline of opportunities, Aerospace & Electronics remains poised to well outperform its markets over the next decade. Very proud of our team.

But that is not one that you would say crane is going to go down a path of completely automated facilities.

With that the Max is like you said very specific areas, where work is difficult to make it more reliable. So we have a lot of projects and that's not that factory automation.

Second area, where we're investing in automation and just where skilled labor is difficult to get like welding.

We're trying to get more and more automated and various welding applications.

Again to summarize more focus on specific tasks that are difficult to maintain.

Then trying to address skilled workforce gaps more so than fully automating a particular factor.

That's very helpful. Thanks, gentlemen, great job.

Thanks, Tony.

Thank you.

And once again, if you do have a question you May press star one on your telephone keypad at this time.

We have a follow up from Scott <unk> with Deutsche Bank. Please go ahead. Your line is open.

That's all right I'm going to beat up kind of beat up on rich to your follow ups first is the F 16 break retrofit program still on track to hit that $30 million revenue target for 2026.

Alejandro Alcala: Our Process Flow Technologies, similar to Q2, and markets are stable, and we remain well-positioned to outgrow across the cycle. We continue to see strength in segments such as wastewater, pharmaceuticals, cryogenics, and also power, while chemical markets remain soft yet stable. As a reminder, we have systematically repositioned our portfolio over the past decade around our core end markets where we have the strongest competitive position and the most differentiation, enabling sustainable market outgrowth. Tactically, we have proven our ability to react to any changes in demand quickly, and we will remain nimble, taking any necessary and appropriate price and productivity measures required. Our focus and discipline enable us to continue to win in this segment despite the slower growth environment. That was reflected in Q3. For example, our municipal wastewater pump business is on track for double-digit growth, driven by strong momentum and new product adoption.

Yes. It is.

Okay and then for 2025, there is essentially nothing in the base rate.

Correct.

Okay, and then rich is it fair to think that any organic growth accelerates next year, given what seems to be a story of acceleration across commercial OE military OE and military aftermarket.

Yes, I would say that.

When you think about how our external guidance over the long term has been 7% to 9% I think it's safe to say, we'll be at the high end of that range at this point.

Scott commercial OE continues to be.

A positive I think what we're continuing to grow.

Beginning with our teams on the from the plants on the aftermarket discussion right, which is it's been much stronger than we even anticipated coming into this year does that pace year over year on a comp basis continue.

Or what does that mix look like I think that is the unknown for US right now is that fair.

Yes, I do think Thats fair I think I think our algorithm theyre still holds but what elements would be OE versus aftermarket is going to be something that will be teasing out over the next couple of months.

But as Youre thinking about it Scott.

I would look at that long term algorithm in the way.

Alejandro Alcala: At WestTech this year, we introduced a high-efficiency cyclone wastewater pump, featuring advanced non-cog and pellet technology with leading efficiency metrics. Shipments began in Q3, and as we head into 2026, a robust sales funnel gives us confidence in delivering another year of strong growth for this business. Also, our cryogenics business continues to execute commercially with a number of orders across aerospace and defense, space launch, satellite production, and semiconductor investments. Overall, we secured double-digit growth in new orders in the quarter within cryogenics, reflective of our front-end engineering support and manufacturing capability as a differentiator in the market. Additionally, we won a $6 million large pharmaceutical order supporting capacity expansion to manufacture GLP-1 drugs. Our ability to deliver high-performance solutions for critical pharmaceutical applications continues to differentiate us in a competitive market and positions us well for future growth in this space.

Positioned at where we think we're going to fall.

Okay. Thank you and then just one last one the corporate costs.

Is this level of <unk> 5 million dollar number or is this a level. You think you can hold for next year or is that kind of want to grow next year with tsi coming in and things like that yes, no. We don't we don't see it growing next year.

To be Frank with you you look at what our rate is today, it's like I don't know three 8% I would expect that to go down.

And we're going to leverage the growth and Youll see it closer to 3% next year all up all in.

Great. Thank you guys.

Thank you.

Thank you.

And this concludes the Q&A portion of today's call I'd like now I'd like to turn the call over to Max Mitchell for closing remarks.

Thank you all for joining US today, we often talk about claims of those systems are foundational and holistic operating system. Many companies claimed to have some form of an operating system I often get the question from investors as to what makes us unique.

We believe it is the intensity of the culture people and processes and how we apply the principles to our processes down to the smallest details, which makes the clean business system unique.

Alejandro Alcala: Lastly, despite the headwind facing the chemical industry, our teams continue to secure targeted opportunities, largely tied to preventative maintenance and technology upgrades. Looking ahead to the balance of 2025, given our line of sight today, we maintain our view for core growth to fall at the lower end of our low to mid-single-digit growth range that we guided to last quarter, but with greater margin expansion as core volumes were leveraged at the higher end of our targeted range for the full year despite tariff headwinds. Overall, both our businesses remain well-positioned to continue to deliver outstanding results into 2026. Now, let me turn the call over to our CFO, Mr. Richard Maue, for more specifics on the quarter.

<unk> celebrated but never good enough in every detail is important to us moving forward as.

As the late Great Giorgio Armani set to create something exceptional.

Your mindset must be relentlessly focused on the smallest detail.

Our teams are relentless with the details building a stronger and more exceptional crane. Thank you all for your interest in Crane and your time and attention. This morning have a great day.

Okay.

Thank you.

This concludes today's training company third quarter 2025 earnings conference call.

Please disconnect your line at this time and have a wonder.

Richard Maue: Thank you, Alex, and good morning, everyone. As we were getting ready for our Q3 earnings release this past month, and as I reflected on the consistency of our execution and overall results generally, a movie quote came top of mind that one of our investors mentioned at a recent sell-side conference in describing our consistency. One of my favorite actors, Ryan Reynolds, had this moving quote while portraying AAA-rated executive protection agent Michael Bryce in a romantic and touching comedy, The Hitman's Bodyguard, when describing his job. "Boring is always best." I have heard from many of you and appreciate all the movie quote suggestions that you have all sent over the last year, so feel free to send me your best thoughts on lines in the future that tie to Crane in your view.

Richard Maue: Anyone suggesting a quote that we actually use on a call will receive a free Crane coffee mug autographed by me. In all seriousness, while the environment is certainly not boring, our story remains unchanged, and our teams continue to execute to win, driving results above expectations in the most consistent and boring manner possible, despite the well-documented headwinds we are all facing every day. With that, let me start off with total company results. We drove 5.6% core sales growth in the quarter, driven primarily by the ongoing strength within Aerospace & Electronics. Adjusted operating profit increased 19%, driven by continued strong net price and solid productivity. In the quarter, core FX neutral backlog was up 16% compared to last year, reflecting continued strength at Aerospace & Electronics, and core FX neutral orders were up 2%.

Richard Maue: From a balance sheet perspective, while we are in a net positive cash position, at the end of the quarter, we completed financing with our bank partners for our pending acquisition of Precision Sensors & Instrumentation (PSI). We entered into a credit agreement that included a $900 million delayed draw term loan and a $900 million revolving credit facility, both maturing on September 30, 2030. We expect to finance PSI primarily with the proceeds of the term loan and cash on hand, leaving the $900 million revolving credit facility available for further M&A and normal working capital management. Consistent with our prior commentary, after the PSI transaction, our net leverage will be just over one times, still well below our two to three times targeted range, leaving us well-positioned for further M&A.

Richard Maue: With respect to tariffs, we continue to expect the gross cost increase to be roughly $30 million for the year, inclusive of the impact of the Section 232 tariffs, so no change there. As we said last quarter, we expect to offset tariff impacts through price and productivity, and our teams are prepared to react appropriately to any further changes that may occur in this dynamic area. A few more details on the segments in the quarter. Starting with Aerospace & Electronics, sales of $270 million increased 13% in the quarter, nearly all of that organic growth. Even with the continued high level of core sales growth, our record backlog of just over $1 billion, up 27% year over year, was up slightly sequentially. Core orders were up 5% in line with our expectations, as some orders that we anticipated later in the year were received in the first half.

Richard Maue: No surprises and continued strong demand broadly. Total aftermarket sales increased 20% with commercial aftermarket up 23% and military aftermarket up 12%. OEM sales increased 10% in the quarter, with both commercial and military up 10%. Adjusted segment margin of 25.1% expanded 160 basis points from 23.5% last year, primarily reflecting strong net price, solid productivity, and the impact from the higher volumes. We expect operating margin to be modestly lower in Q4 due to typical seasonality and less favorable mix between commercial OE and aftermarket. At Process Flow Technologies, in Q3, we delivered sales of $319 million, up 3%, with flat core performance in the quarter, along with a 1.6% benefit from the TechnoFab acquisition and one and a half points of favorable foreign exchange. Compared to the prior year, core FX neutral backlog decreased 5%, and core FX neutral orders were down slightly as expected.

Richard Maue: Adjusted operating margin of 22.4% expanded again, and in the quarter was 60 basis points higher than last year, driven by strong productivity, mix, and net price, inclusive of tariff headwinds in the quarter. Moving to guidance, there were a couple of non-operational changes below the segments. We now expect corporate expense of $85 million, modestly above our prior view of $80 million, due primarily to M&A activity. We also now anticipate net non-operating income to be closer to $7 million, up from $4 million, due to higher investment income on our cash balances. A quick reminder that this non-operating income also includes about $9 million of business interruption insurance recovery recorded in other income expense related to Hurricane Helene, around $6.7 million of which has been recognized year to date with $2.7 million in the quarter.

Richard Maue: Last, our tax rate for the full year will be slightly lower, with us now estimating a 23% tax rate for the full year versus our prior estimate of 23.5%. Those three non-operational items net to a very slight benefit of about $0.01, with the other $0.19 of the guidance increase at the midpoint coming from the segments. Operationally, we didn't change the full-year core growth guidance range of 4% to 6%, but we now expect to be in the upper half of that range, given the strength at Aerospace & Electronics, and that growth should leverage at our normal rates on a full-year basis. Given our excellent results to date and our current view on Q4, we are raising adjusted EPS guidance by $0.20 at the midpoint and narrowing the range to be within $5.75 to $5.95, again reflecting 20% growth year over year at the midpoint.

Richard Maue: Overall, another outstanding quarter, another outstanding year against a very dynamic macro backdrop. With that, Operator, we are now ready to take our first questions.

Operator: The floor is now open for questions. At this time, if you have a question or comment, please press star one on your telephone keypad. If at any point your question is answered, you may remove yourself from the queue by pressing star two. Again, we ask that you pick up your headset when posing your questions to provide optimal sound quality. Thank you. Our first question is coming from Matt Somerville with DA Davidson. Please go ahead. Your line is open.

[Analyst 1]: Thanks, Matt. A couple of questions. First on PFT, can you talk about if the expectation is that the business is up organically low single digits for the year, if you look at the non-chemical portion of PFT, how does that look relative to that low single-digit number? On the chemical side, what specifically do you expect out of that end market this year? Maybe how you're thinking about that exposure, which is fairly large for the segment through, say, an 80/20 type of overlay. I have a follow-up.

Alejandro Alcala: Yeah, Matt. Thank you. This is Alejandro Alcala. Just to frame up the markets and what we're seeing and responding to your question, I think regionally is different than by markets is different. As a reminder, we're in Process Flow Technologies primarily on almost half or a little bit over half on America's base business, which is a positive in this environment. First, speaking to the non-chemical markets, wastewater, for example, North America-based, we're seeing double-digit growth in that business driven by investment in the aging infrastructure, environmental. That's been strong. We expect that to continue to be strong going into next year. Cryogenics through our new acquisitions in various applications, semiconductors, electronics, and the space launch I mentioned last quarter, driven by that commercial aerospace market of launch. We participate in the platforms and the build-out of platforms.

Alejandro Alcala: That's been growing, also double digits, and we're gaining significant share as well. Just recently visited with the team there, and they were highlighting their commercial excellence in the front end where they have a tablet now in their own site. They're able to sketch the project, convert it into a drawing with this application, send it into the front end, and really reduce the lead time, which is important to our customers. Doing very well. Also highlight pharmaceuticals, in particular in North America, strong growth there this year. We are seeing this reshoring activity happening in North America. We expect that to continue in the U.S. Big project that we won with a key customer related to the old P1 drug as they're expanding and producing in the U.S. We expect more of those investments to happen.

Alejandro Alcala: Also in power, very North American-based, driven by the demand and power that everybody knows about AI data centers. Those are all the non-chemical markets that are highlighted that are positive, and we continue to see positive growth into next year. I think when we think about chemical, also varying by region. North America, we've seen some good projects this year, good activity on expansions, productivity. A reminder, in America, has the advantage of this feedstock and cost advantage. Even though there's capacity globally, customers have advantage to investing in the U.S. and expanding and getting more output. That is moving in a positive way. Also, Middle East, those are the two markets that we highlight in chemical that have been positive. Softer Europe and China as well have been down.

Alejandro Alcala: As far as our exposure in chemical, how we think about it, to answer your question, your second part of your question, looks at the chemical market. There's a lot of things that we like in the applications that we play, very critical, corrosive, toxic, abrasive applications that give us an opportunity to differentiate, add value for our customers. We like that. Obviously, the cyclicality of the market sometimes is a challenge. As you know, over the last decade, we've worked to reshape the portfolio, investing in cryogenics, organically and inorganically, wastewater, and we'll continue to do so. Highlighting our recent Precision Sensors & Instrumentation (PSI) acquisition as well in the markets where they play, in nuclear and aerospace, differentiated technology, also wastewater. We'll continue to invest in these higher growth markets, but maintain our current presence in chemical and keep building on that.

Alejandro Alcala: Overall, we'll continue to shape that underlying growth in our Process Flow Technologies segments.

[Analyst 1]: Thanks for all that color, Alex. Just another one on PFT, the margin upside you saw in the quarter. Can you maybe help parse out what the key drivers of that upside may have been, whether it be price-cost mix or just, you know, cost outs, and then how we should be thinking about those various levers at a high level as we think about next year? Thank you.

Alejandro Alcala: Yeah. As we think about PFT, the journey we've been on for the last decade, growing and delivering more than 100 basis points or close to 100 basis points on average, really driven by several factors. One is our continued innovation, new product launches that we've highlighted in the past. Our new product sales keeps growing as a % of our portfolio. The new products are in these target markets more differentiated, and we're able to have higher margin because of that. We're driving commercial excellence, value pricing, standing up for the technology and the problems we're solving for our customers. Third, this traditional or relentless focus on operational excellence and waste elimination, which is core. I would highlight those three elements.

Alejandro Alcala: What's different in this environment is this tariff dynamic, which I've been very, very pleased with how the teams have been able to manage that through both price and supply chain, which I think is a real differentiator for us to be able to do that and not only maintain but expand our margins here in this environment. It speaks to the quality of our portfolio and the quality of execution from our teams.

[Analyst 1]: Great. Thanks, Alejandro.

Operator: Thank you. Our next question comes from Justin Ages with CJS Securities. Please go ahead.

[Analyst 2]: Hi. Morning, all.

Alejandro Alcala: Hey, Justin.

[Analyst 2]: I was hoping, you mentioned in PFT some softness in chemical. I was just wondering if you could comment, maybe you're seeing signs of ongoing stabilization or maybe a return to growth. Just trying to get a sense of when that might rebound.

Alejandro Alcala: Yeah. We've definitely seen it stable throughout the year. In the first half, we hit some big projects. Projects continue to move more so in the Middle East and North America. MRO globally has been stable throughout the year, so that's been a big part of our success. There are definitely no signs of deterioration, stability, and it's just a matter of when this will start recovering. At some point, we expect next year for chemical. You know, no clear inflection yet, but stable and expected to improve next year.

Max Mitchell: You know, Justin, as I think about what's taking place globally, and everyone else has had to react to changes in the tariff structure and other news that happens on a daily basis. Again, pleased with how we continue to stay very agile to react as appropriate. Within our control, I'm incredibly proud of what we continue to drive within our control. If I look at the broader market, I'm more on the bullish end just generally because I believe that, while there's a lot of noise right now that we're all having to deal with, I believe that this will be settling out here towards the end of the year into next. Just my own reading of the tea leaves and the administration's approach. I'm more optimistic and planning around it for our teams in terms of what that means. It's still early days.

Max Mitchell: We have our plan meetings coming up here in the month of November to really kind of lock in what it means for 2026. I'm more optimistic of where all this shakes out and what that means for the broader global economy. For what that's worth.

[Analyst 2]: All right.

Max Mitchell: My opinion is not worth anything more than anyone else's.

[Analyst 2]: Yeah, it's worth a lot. I appreciate the answers. Switching to the Precision Sensors & Instrumentation, you know, just back of the envelope, the margins, you know, a little bit under Crane. Can you just talk about applying the Crane Business System or the machine to Precision Sensors & Instrumentation and what you're expecting to see in margin improvements once you've integrated them?

Alejandro Alcala: Yeah, Justin, this is Alejandro. We haven't closed the business yet. We haven't closed the deal. Expect that to be January 1. We'll provide more details after. Generally speaking, these businesses have incredible technology, very stable aftermarket. We expect these businesses to become one of our best businesses within Crane from a margin and growth standpoint in our portfolio. The improvements that we'll drive are not different than what we've been able to do, in particular on the Process Flow Technologies side, through driving overall Crane Business System. These will become accretive to our profile over the years. They have all the fundamentals. I'll speak in more detail of how the different elements will play out or how we see them play out with the coming year. I can tell you I'm very, very confident that we will deliver with this acquisition.

Alejandro Alcala: Very pleased with everything I'm seeing and our preparations to execute.

[Analyst 2]: All right, thanks for taking the time.

Alejandro Alcala: Thank you.

Operator: Thank you. We will move next with Damian Karas with UBS. Please go ahead.

[Analyst 3]: Hey, good morning, everyone. Congrats on the progress.

Alejandro Alcala: How are you, Damian?

[Analyst 3]: Hey, doing well, thank you.

Alejandro Alcala: Good.

[Analyst 3]: I wanted to ask you a follow-up question related to margins, and in particular your guidance for the year. It seems like it's, you know, I'm taking in a step down in fourth quarter margins. Definitely a notable break from the strength you've been exhibiting so far, the first three quarters of the year. I think even on a year-over-year basis, you know, the incremental margin is definitely well below kind of the 35 to 40% plus you guys, you know, aspire to. Can you just maybe provide a little bit more color around that margin expectation for the fourth quarter? Any moving pieces there?

Richard Maue: Yeah, sure. Damian, this is Rich. The primary area would be similar to what we talked about the last couple of quarters, with respect to the year-over-year headwinds that we're going to see in commercial aftermarket. I would admittedly say that we actually had a little bit of a better quarter here in Q3, and we didn't see as much of that headwind. We do expect that in the fourth quarter. A couple of items that I would point to is that we did see a few initial provisioning orders that we benefited from in Q3. We saw a decent claim recovery. We did see a few things that did benefit us here in the quarter. What I would also say is two other things.

Richard Maue: One, we're continuing to see the OE build rates continue, and that's a natural mix, you know, unfavorable mix element, although we are excited about it. The second item would be when you look at the fourth quarter, we tend to have lower production hours. There's a little bit of seasonality in what we would typically exhibit in the fourth quarter at Aerospace & Electronics. All that said, I would tell you that on a full-year basis, we're going to probably be at the higher end of our targeted leverage range for Aerospace & Electronics, and we'll exceed at Process Flow Technologies. Yes, we had a great nine months. We still expect a great fourth quarter, but it'll be a little bit more muted for those reasons.

[Analyst 3]: Understood. That's really helpful. Sorry if I missed any comments related to this earlier, kind of hopping around a bunch of calls today. Would you guys give us your thoughts on the U.S. government shutdown? Are you seeing or expecting any impact from that? Just, you know, kind of thinking about that, should this continue into the extended future?

Richard Maue: Yeah. I mean, right now, it's not impacting us today. The things that we would look to are paying bills and things like that. We've got no signals of that at all. So far, so good in terms of any impacts to Crane. At this point, there's nothing on the horizon that would suggest any impact to us here even as we get into the first quarter.

[Analyst 3]: Okay. Great. Thanks, guys. Good luck.

Alejandro Alcala: Thanks, Damian.

Operator: Thank you. Our next question comes from Scott Fischell with Deutsche Bank. Please go ahead. Your line is open.

Alejandro Alcala: Morning, Scott.

[Analyst 3]: Hey, good morning. Alex, you mentioned power and data center demand as being a supportive market for PFT in your response to Matt's question, I think. Can you share a bit more detail there on what you're seeing in that market and how it's benefiting Crane?

Alejandro Alcala: Yeah, for sure. Power, primarily U.S.-based, for us, less than 10% really our portfolio in PFT. We've been in this business for a very long time, with our valve portfolio primarily. What we're seeing is these power demand that is well documented and the investment in combined cycle, natural gas combined cycle plants around the country. I think just this year, there's more than, close to 30 power plants that are moving forward. We see content there. Natural combined cycle plants are still a very economic way to produce electricity, very reliable. As you know, abundance of natural gas in the United States. That is our participation there, with our valve portfolio. We expect that to continue into next year. Funnels have been increasing, projects are up. Funnels have been increasing. I think they can't build them fast enough, basically, on the natural gas side.

[Analyst 3]: Do you have any content on smaller reciprocating engines like those that Caterpillar makes?

Alejandro Alcala: No, we don't have content in that.

[Analyst 3]: Okay. Max, are you investing organically at PFT to increase your ship set content on the AP1000? Obviously, some big news out this morning. I was curious if that can maybe be a bigger driver for you all than your historical content suggested.

Max Mitchell: Yeah, thanks, Scott. You could argue that the order stokes in long term is absolutely aimed at gaining content on the AP1000. The team is already underway with technology investments to penetrate the pressurized water reactor, in addition to boiling water. Long term, absolutely, as we continue, the current team is doing a phenomenal job and has done as we have when we first won AP1000 content many, many years ago to the tune of about $10 million per ship set. We're identifying another 30% increase in content right now that we're bidding on, capturing additional share gain also. Both organically as well as inorganically as we move forward, for sure. That was an exciting announcement today. Exciting announcement that, I think in addition just to the announcement today related to the $80 billion investment that the government announced in support.

Max Mitchell: I think you're just seeing this change over time that will continue this trend of nuclear as part of a broader global solution to clean and efficient power that will continue to build well for us in our position also.

[Analyst 3]: Thank you.

Alejandro Alcala: Thanks, Scott.

Operator: Thank you. Our next question comes from Nathan Jones with SyFlo. Please go ahead.

Alejandro Alcala: Morning, Nathan. You there, Nathan?

Operator: Nathan, your line is open. Please check your mute.

[Analyst 3]: Hey. Sorry, guys. Technical failure on my end. Good morning, everyone.

Alejandro Alcala: I'm fine. You there?

[Analyst 3]: Morning. I'm finding it a bit hard to concentrate with the promise of a signed Richard Maue Crane coffee mug, I guess.

Alejandro Alcala: I hear you. Go for it.

[Analyst 3]: I guess, just another question on the PSI businesses. Max, one of the comments you made was that you, from a strategic perspective, are more bullish on that business than you were three months ago. Maybe you could just talk a little bit more about what you've learned in the last three months that makes you strategically more positive on the outlook for that business.

Max Mitchell: It starts with the team itself. I think we just continue to be impressed with the caliber of the talent that's going to be joining Crane. I just love the openness and transparency that we've been met with to date. That feels really good in terms of integration, integration planning, working well together. It's what I know is taking place already. This is not a team that has stood still. They've been investing for growth, and we're going to quickly get aligned strategically as we're moving forward. It just all feels very, very positive from that standpoint. Sharing of data, kind of getting clarity strategically on what we're going to be working on together from day one. It's been a fantastic relationship. What else would you highlight, Alex?

Alejandro Alcala: Yeah, I think over these months, Nathan, it's just getting more clarity on the specifics of how we're going to collaborate and work together. You know, the detailed plans and the opportunities, just having a very clear line of sight to the gains, starting with Aerospace & Electronics and the nuclear, also with Panametrics. The level of detail that we've been able to get and the plans of where we're going to prioritize and where we're going to be able to have quick gains gives us this higher confidence where we were three months ago. It just keeps increasing as those plans get more defined and more details get clarified.

[Analyst 3]: I'll just ask a broader question about 2026. You guys have always been pretty willing to share your outlook. I mean, you're obviously going to get towards the top end of the growth, 4% to 6% growth target this year. We have seen organic growth slow down a bit as we've gone through the year. Maybe you could just talk about, you know, do you think we're in the 4% to 6% range next year? Maybe it'll be, you know, a little more towards the middle next year, or just any thoughts you have on how the growth outlook might shake out for next year?

Max Mitchell: It's still early days. We've got our plan meetings coming up. There's a lot to monitor here in the fourth quarter. Having said all that, based on what I know today, based on what we feel today, based on thinking through the end markets and how that will continue to play out, it still feels like our investment thesis holds into next year, Nathan, from that standpoint.

[Analyst 3]: Okay. I guess we'll wait for the full Q update. Thanks very much for taking my questions.

Max Mitchell: Thanks, Nathan.

Operator: Thank you. Our next question comes from Jordan Leonie with Bank of America. Please go ahead. Your line is open.

Richard Maue: Hey, good morning.

Alejandro Alcala: Morning.

[Analyst 2]: On defense and aero, how should we think about the opportunity for you guys if we start to see announcements for F/A-XX, CCA down selects, and some of the larger group four and five drones that have been kind of previewed?

Alejandro Alcala: Yeah, Jordan. This is Alejandro Alcala. You know, on the F/A-XX or the NGAD platforms, we are very well positioned on all the demonstrators, really. We've been successful in having multiple horses in the race, and we're going to see strong benefit from that. On the CCA activity, I think we've mentioned we've already secured a position with one of the leading emerging players in that space, with TCA, which is going to start ramping up here in the years to come. In general, in drones, we're actively involved overall. I think, as you know, there's a wide range of drones that exist from the small battery-powered hand-launched, those that are called like Switchblade or Phoenix, and we do not participate in that small.

Alejandro Alcala: Where we do play is on the medium or larger drones that are part of that CCA, like those that you see called out, like Fury, Global Hawk, Predator. We're well positioned there with various solutions, and we expect to benefit as that market continues to grow.

[Analyst 2]: Got it. For how strong demand has been for both the build in Aerospace & Electronics, how are you guys thinking about the current capacity you have in place to meet that demand?

Alejandro Alcala: As far as capacity, we've been well prepared to meet that demand and the ramp-up rates of the OEMs, both Airbus and Boeing. I think teams have done a really nice job preparing for that, even taking advantage of preparing inventory buffers to execute at a very high level to support those ramp rates. Quite confident in our ability to support.

Richard Maue: Got it. Thank you, guys.

Alejandro Alcala: Thank you, Jordan.

[Analyst 2]: Thanks, Jordan.

Operator: Thank you. Our next question comes from Tony Bancroft with Gabelli Funds. Please go ahead. Your line is open.

[Analyst 1]: Good morning, Jens. Good morning, Jens. Congratulations on the great quarter and all your great work. I recently toured a new facility and was pretty overwhelmed by the amount of automation that was going into it. I just wanted to get your view on automation. You've talked a lot about it. It looks like you guys have a lot of backlog growing. I know on the commercial side, it sounds like you're ready to go with capacity, but it sounds like there's a lot of growth on both sides of the businesses and in other areas, obviously, things like Golden Dome and all of that. Maybe you could just talk about how you view automation in the long term and what that could get you maybe on a margin basis and then maybe overall on ability to grow faster.

Max Mitchell: I'll take a stab in the end if Alex says anything else. Look, we've always looked at enhancing productivity, easing the work by trying to error-proof and take out cycle time. What's manual? How can we automate? We have a lot of success with cobots across the organization on a localized level. To be completely honest, Tony, I'm not sure what the technology is that you saw, what type of facility. You know, there are certain technologies that just warrant themselves to a complete automation, from start to finish and that level of investment. There is no one Crane site that I can think of that would have that type of vision.

Max Mitchell: It will continue to be, while automation is clearly a direction that we will go down, it tends to be very spot-based and specific to very specific tasks that continue to take out variation over burden on our associates. At some point in the future, do you link our work centers to begin to get flow, cells that flow? The human element for us will always be important in the near future with the type of work that we do across the organization. I see it as part of the broader strategy for us holistically as we drive productivity on a number of fronts. That is not one that you would say, you know, Crane is going to go down a path of completely automated facilities.

Alejandro Alcala: Yeah. The path to Max is, like he said, very specific areas where work is difficult to make it more reliable. We have a lot of projects in that, not factory-wide automation. The second area where we're investing in automation is just where skilled labor is difficult to get, like welding. We're trying to get more and more automated in various welding applications. To summarize, more focus on specific tasks that are difficult to maintain and then trying to address skilled workforce gaps more so than fully automating a particular factory.

[Analyst 1]: That's very helpful. Thanks, Jens. Great job.

Max Mitchell: Thanks, Tony.

Operator: Thank you. If you do have a question, you may press star one on your telephone keypad at this time. We have a follow-up from Scott Duchelle with Deutsche Bank. Please go ahead. Your line is open.

Alejandro Alcala: Yes, sir.

[Analyst 3]: All right. I'm going to beat up on Rich with a few follow-ups. First, is the F-16 brake retrofit program still on track to hit that $30 million revenue target for 2026?

Alejandro Alcala: Yes, it is.

[Analyst 3]: Okay. For 2025, there's essentially nothing in the base, right?

Alejandro Alcala: Correct.

[Analyst 3]: Okay. Rich, is it fair to think that A&E organic growth accelerates next year, given what seems to be a story of acceleration across commercial OE, military OE, and military aftermarket?

Richard Maue: I would say that, you know, when you think about how our external guidance over the long term has been 7% to 9%, I think it's safe to say we'll be at the high end of that range at this point. Scott?

Max Mitchell: Commercial OE continues to be a positive. I think what we're continuing to do is we're going to be meeting with our teams from the plans on the aftermarket discussion, which is it's been much stronger than we even anticipated coming into this year. Does that pace year over year on a comp basis continue, or what does that mix look like? I think that is the unknown for us right now. Is that fair?

Richard Maue: Yeah, I do think that's fair. I think our algorithm there still holds. What elements would be OE versus aftermarket is going to be something that we'll be teasing out over the next couple of months. As you're thinking about it, Scott, I would look at that long-term algorithm and the way I positioned it, where we think we're going to fall.

[Analyst 3]: Okay. Thank you. Just one last one, the corporate costs. Is this level, this $85 million number, is this a level you think you can hold for next year, or is that going to want to grow next year with PSI coming in and things like that?

Richard Maue: Yeah, no, we don't see it growing next year, to be frank with you. You know, you look at what our rate is today. It's like, I don't know, 3.8%. I would expect that to go down, and we're going to leverage the growth, and you'll see it closer to 3% next year, all up, all in.

[Analyst 3]: Great. Thank you, guys.

Alejandro Alcala: Thanks, Scott.

Operator: Thank you. This concluded the Q&A portion of today's call. I would now like to turn the call over to Max Mitchell for closing remarks.

Max Mitchell: Thank you all for joining us today. We often talk about the Crane Business System, that it's our foundational and holistic operating system. Many companies claim to have some form of an operating system, and I often get the question from investors as to what makes ours unique. We believe it is the intensity of the culture, people, and processes, and how we apply the principles to our processes down to the smallest details, which makes the Crane Business System unique. Results are celebrated but never good enough. Every detail is important to us moving forward. As the late great Giorgio Armani said, "To create something exceptional, your mindset must be relentlessly focused on the smallest detail." At Crane, our teams are relentless with the details, building a stronger and more exceptional Crane. Thank you all for your interest in Crane and your time and attention this morning.

Max Mitchell: Have a great day.

Operator: Thank you. This concludes today's Crane Company third quarter 2025 earnings conference call. Please disconnect your line at this time and have a wonderful day.