Q1 2026 Crane Co Earnings Call

April 28, 2026

Speaker #1: Welcome to the Crane Company first quarter 2026 earnings conference call. At this time, all participants have been following the presentation. If you'd like to ask a question at that time, please press star one on your telephone keypad.

Speaker #1: If at any point your question has been answered, you may remove yourself from the queue by pressing star two. So others can hear your questions clearly, we ask that you pick up your handset for best sound quality.

Speaker #1: Vice President of Investor Relations, please go ahead.

Speaker #2: Thank you, Operator, and good day everyone. Welcome to our first quarter 2026 earnings release conference call. I'm Alison Plyniak, Vice President of Investor Relations.

Speaker #1: Please stand by your m. Welcome to the Crane Company first quarter 2026 earnings conference call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions following the presentation.

Operator: Welcome to the Crane Company Q1 2026 Earnings Conference Call. At this time, all participants have been placed in a listen-only mode, and the floor will be open for questions following the presentation. If you'd like to ask a question at that time, please press star 1 on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star 2. Others can hear your questions clearly, we ask you pick up your handset for best sound quality. Lastly, should you require operator assistance, please press star 0. I would like to now turn the call over to Allison Poliniak-Cusic, Vice President of Investor Relations. Please go ahead.

Speaker #2: Our call this morning, we have Alex Altman, President and Executive Officer, and Rich Maui, Executive President and Chief Financial Officer. Along with Jason Feldman, Senior Vice President, Investor Relations, Treasury, and Tax, who's on for Q&A.

Operator: Welcome to the Crane Company Q1 2026 Earnings Conference Call. At this time, all participants have been placed in a listen-only mode, and the floor will be open for questions following the presentation. If you'd 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. Others can hear your questions clearly, we ask you pick up your handset for best sound quality. Lastly, should you require operator assistance, please press star zero. I would like to now turn the call over to Allison Poliniak-Cusic, Vice President of Investor Relations. Please go ahead.

Speaker #1: If you'd 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.

Speaker #2: We will start off with a few questions from Alex and Rich, after which we'll respond to questions. Just a reminder, the comments made on this call will be forward-looking statements.

Speaker #1: So others can hear your questions clearly, we ask that you pick up your handset for best sound quality. Lastly, should you require operator assistance, please press star zero.

Speaker #2: 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: I would like to now turn the call over to Allison Poliniak, Vice President of Investor Relations. Please go ahead.

Speaker #2: Also, during the call, we will use numbers, which are recommended to the numbers in tables and our press release, and accompanied by presentation. Both of which are available on our website at www.craneco.com, and the Investor Relations section.

Speaker #2: Thank you, Operator, and good day everyone. Welcome to our first quarter 2026 earnings release conference call. I'm Allison Poliniak, Vice President of Investor Relations.

Allison Poliniak-Cusic: Thank you, operator, and good day, everyone. Welcome to our Q1 2026 earnings release conference call. I'm Allison Poliniak-Cusic, Vice President, Investor Relations. On our call this morning, we have Alejandro Alcala, President and Chief Executive Officer, and Richard A. Maue, our Executive Vice President & Chief Financial Officer, along with Jason D. Feldman, Senior Vice President, Investor Relations, Treasury & Tax, who's on for Q&A. We will start off our call with a few prepared remarks from Alex and Rich, after which we'll respond to questions. Just a reminder, the comments we make on this call will include forward-looking statements. We refer you to the cautionary language at the bottom of our earnings release and also in our annual report, 10K, and subsequent filings pertaining to forward-looking statements.

Allison Poliniak-Cusic: Thank you, operator, and good day, everyone. Welcome to our Q1 2026 earnings release conference call. I'm Allison Poliniak-Cusic, Vice President, Investor Relations. On our call this morning, we have Alejandro Alex Alcala, President and Chief Executive Officer, and Richard A. Maue, our Executive Vice President & Chief Financial Officer, along with Jason D. Feldman, Senior Vice President, Investor Relations, Treasury & Tax, who's on for Q&A. We will start off our call with a few prepared remarks from Alex and Rich, after which we'll respond to questions. Just a reminder, the comments we make on this call will include forward-looking statements. We refer you to the cautionary language at the bottom of our earnings release and also in our annual report, 10K, and subsequent filings pertaining to forward-looking statements.

Speaker #2: On our call this morning, we have Alex Alcala, President and Chief Executive Officer and Rich Maue, our Executive Vice President and Chief Financial Officer, along with Jason Feldman, Senior Vice President, Investor Relations Treasury and Tax, who's on for Q&A.

Speaker #2: Now, let me turn the call over to Alex.

Speaker #3: Thank you, Alison. Good morning, everyone. We appreciate you joining today. As I step into the role of CEO, I'm energized by the opportunity to lead Crane at a time with strong leadership, discipline, execution, and agility truly matter.

Speaker #2: We will start off our call with a few prepared remarks from Alex and Rich, after which we'll respond to questions. And just a reminder, the comments we make on this call will include forward-looking statements.

Speaker #3: Much like this time a year ago, we were offered an environment that continues to evolve rapidly. Fortunately, our business system, the CBS machine, together with our global team's relentless focus, resilience, and commitment to execution with a disciplined cadence, continues to differentiate Crane.

Speaker #2: 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 #2: 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 accompanied slide presentation.

Allison Poliniak-Cusic: 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 Alex.

Speaker #3: We not as opportunities to elevate our performance. Time and again, Crane has emerged from challenging environments stronger than before, and increasingly advantaged relative to our competitors.

Speaker #2: Both of which are available on our website at www.craneco.com and the Investor Relations section. Now, let me turn the call over to Alex.

Speaker #3: Thank you, Allison, and good morning everyone. We appreciate you joining us today. As I step into the role of CEO, I'm energized by the opportunity to lead Crane at a time when strong leadership, disciplined execution, and agility truly matter.

Alejandro Alcala: Thank you, Allison, and good morning, everyone. We appreciate you joining us today. As I step into the role of CEO, I'm energized by the opportunity to lead Crane at a time when strong leadership, disciplined execution, and agility truly matter. Much like this time a year ago, we're operating in an environment that continues to evolve rapidly. Fortunately, our business system, the CBS machine, together with our global team's relentless focus, resilience, and commitment to execution with a disciplined cadence, continues to differentiate Crane. We view periods of uncertainty and market dislocation not as obstacles, but as opportunities to elevate our performance. Time and again, Crane has emerged from challenging environments stronger than before and increasingly advantaged relative to our competitors.

Alejandro Alex Alcala: Thank you, Allison, and good morning, everyone. We appreciate you joining us today. As I step into the role of CEO, I'm energized by the opportunity to lead Crane Co at a time when strong leadership, disciplined execution, and agility truly matter. Much like this time a year ago, we're operating in an environment that continues to evolve rapidly. Fortunately, our business system, the CBS machine, together with our global team's relentless focus, resilience, and commitment to execution with a disciplined cadence, continues to differentiate Crane. We view periods of uncertainty and market dislocation not as obstacles, but as opportunities to elevate our performance. Time and again, Crane has emerged from challenging environments stronger than before and increasingly advantaged relative to our competitors.

Speaker #3: And we're also strong in 2026. With first quarter results reflecting excellent execution across the company, exceeding our expectations, and underscoring the strength of our teams and our commitment to delivering shareholder value.

Speaker #3: Much like this time a year ago, we're operating in an environment that continues to evolve rapidly. Fortunately, our business system, the CBS machine, together with our global team's relentless focus, resilience, and commitment to execution with a disciplined cadence, continues to differentiate Crane.

Speaker #3: Adjusted EPS of $165 was up 15% over the prior year, driven by 4% growth, reflecting broad-based strength at aerospace and advanced technologies, and continued strong execution at process flow technologies.

Speaker #3: We view periods of uncertainty and market dislocation not as obstacles, but as opportunities to elevate our performance. Time and again, Crane has emerged from challenging environments stronger than before and increasingly advantaged relative to our competitors.

Speaker #3: Including solid core order and backlog momentum. Also, recent actions that show substantial expectations. Drought panel metrics, rotor strokes, and optic all performed exceptionally well.

Speaker #3: And we're off to a strong start in 2026. With first quarter results reflecting excellent execution across the company, exceeding our expectations, and underscoring the strength of our teams and our commitment to delivering shareholder value.

Alejandro Alcala: We're off to a strong start in 2026, with Q1 results reflecting excellent execution across the company, exceeding our expectations and underscoring the strength of our teams and our commitment to delivering shareholder value. Adjusted EPS of $1.65 was up 15% over the prior year, driven by 4% core sales growth, reflecting broad-based strength at Aerospace & Advanced Technologies and continued strong execution at Process Flow Technologies, including solid core order and backlog momentum. Also of note was the strong performance of our recent acquisitions that drove substantial amount of upside in the quarter relative to our expectations. Druck, Panametrics, Reuter-Stokes, and optek-Danulat all performed exceptionally well, with integration and deployment of CBS progressing ahead of plan and early benefits emerging faster than anticipated and ahead of what was reflected in our January 2026 guidance.

Alejandro Alex Alcala: We're off to a strong start in 2026, with Q1 results reflecting excellent execution across the company, exceeding our expectations and underscoring the strength of our teams and our commitment to delivering shareholder value. Adjusted EPS of $1.65 was up 15% over the prior year, driven by 4% core sales growth, reflecting broad-based strength at Aerospace & Advanced Technologies and continued strong execution at Process Flow Technologies, including solid core order and backlog momentum. Also of note was the strong performance of our recent acquisitions that drove substantial amount of upside in the quarter relative to our expectations. Druck, Panametrics, Reuter-Stokes, and optek-Danulat all performed exceptionally well, with integration and deployment of CBS progressing ahead of plan and early benefits emerging faster than anticipated and ahead of what was reflected in our January 2026 guidance.

Speaker #3: With integration and deployment of CBS progressing ahead of plan, and ahead, we entered the year with positive momentum at both AAT and PFT. As the first quarter progressed, our execution further strengthened our confidence in the underlying earnings strategy.

Speaker #3: Adjusted EPS of 165 was up 15% over the prior year. Driven by 4% core sales growth reflecting broad-based strength at aerospace and advanced technologies and continued strong execution at process flow technologies.

Speaker #3: At the same time, the external environment became more challenging. Geopolitical dynamics are evolving, and macroeconomic uncertainty is still very much part of that backdrop.

Speaker #3: Including solid core order and backlog momentum. Also of note was the strong performance of our recent acquisitions that drove substantial amount of upside in the quarter relative to our expectations.

Speaker #3: Taking all of this into account, our performance and the range of scenarios risk opportunities are raising our adjusted full-year outlook by 10 cents to a range of 665 to 685.

Speaker #3: Drug Panametrix Rotostrokes, an optech, all performed exceptionally well. With integration and deployment of CBS progressing ahead of plan, and early benefits emerging faster than anticipated and ahead of what was reflected in our January guidance.

Speaker #3: Our guidance reflects what we have clear line of sight to and high. Even against a more uncertain continued elevated energy prices and inflation to the balance of the year.

Speaker #3: We entered the year with positive momentum at both AAT and PFT. And as the first quarter progressed, our execution further strengthened our confidence in the under directory for the year.

Alejandro Alcala: We entered the year with positive momentum at both AAT and PFT. As the first quarter progressed, our execution further strengthened our confidence in the underlying earnings trajectory for the year. At the same time, however, the external environment became more challenging. Geopolitical dynamics are evolving, macroeconomic uncertainty is still very much part of that backdrop. Taking all of this into account, our performance to date and the range of scenarios, risks and opportunities we see ahead, we are raising our adjusted full-year outlook by $0.10 to a range of $6.65 to $6.85. Our guidance reflects what we have clear line of sight to and high level of confidence in delivering, even against a more uncertain macro backdrop, it assumes continued elevated energy prices and inflation through the balance of the year. Already factors in potential decline in commercial aftermarket.

Alejandro Alex Alcala: We entered the year with positive momentum at both AAT and PFT. As the first quarter progressed, our execution further strengthened our confidence in the underlying earnings trajectory for the year. At the same time, however, the external environment became more challenging. Geopolitical dynamics are evolving, macroeconomic uncertainty is still very much part of that backdrop. Taking all of this into account, our performance to date and the range of scenarios, risks and opportunities we see ahead, we are raising our adjusted full-year outlook by $0.10 to a range of $6.65 to $6.85. Our guidance reflects what we have clear line of sight to and high level of confidence in delivering, even against a more uncertain macro backdrop, it assumes continued elevated energy prices and inflation through the balance of the year. Already factors in potential decline in commercial aftermarket.

Speaker #3: And already factors in potential decline in commercial aftermarket. In addition, as you would expect, our teams have action to get ahead of the increased inflation, remain focused on execution, continuing to build on our momentum, and finding potential opportunities to over-deliver.

Speaker #3: At the same time, however, the external environment became more challenging. Geopolitical dynamics are evolving, and macroeconomic uncertainty is still very much part of that backdrop.

Speaker #3: Taking all of this into account, our performance to date and the range of scenarios risk and opportunities we see ahead we are raising our adjusted full-year outlook by 10 cents to a range of 665 to 685.

Speaker #3: Across the organization, we continue to stay management teams have been here before. We will manage the cadence and discipline execution that you have all come to expect from Crane.

Speaker #3: Our guidance reflects what we have clear line of sight to and high-level confidence in delivering, even against a more uncertain macro backdrop. And it assumes continued elevated energy prices and inflation through the balance of the year.

Speaker #3: Now, some thoughts on the performance of the recent acquisitions and the segments in the quarter. Exceptionally well. I'm extremely pleased with the execution and pace of improvements.

Speaker #3: And already factors in potential decline in commercial aftermarket. Effect, our teams have actions to get ahead of the increased inflation as we move through the year.

Speaker #3: Over the years, we have built tremendous organizational capability that has enabled us to integrate four businesses simultaneously at speed, with zero disruption to the core businesses.

Alejandro Alcala: In fact, our teams have actions to get ahead of the increased inflation as we move through the year. We remain focused on execution, continuing to build on our momentum, and finding potential opportunities to over-deliver. Across the organization, we continue to stay agile in a dynamic environment. Our deep management teams have been here before, and we will manage with the cadence and discipline execution you've all come to expect from Crane. Now some thoughts on the performance of the recent acquisitions and the segments in the quarter, and as we look to the balance of 2026. As I mentioned, the acquisitions performed exceptionally well. I'm extremely pleased with the execution and pace of improvements. Over the years, we have built tremendous organizational capability that has enabled us to integrate 4 businesses simultaneously at speed and with zero disruption to the core businesses.

Alejandro Alex Alcala: In fact, our teams have actions to get ahead of the increased inflation as we move through the year. We remain focused on execution, continuing to build on our momentum, and finding potential opportunities to over-deliver. Across the organization, we continue to stay agile in a dynamic environment. Our deep management teams have been here before, and we will manage with the cadence and discipline execution you've all come to expect from Crane. Now some thoughts on the performance of the recent acquisitions and the segments in the quarter, and as we look to the balance of 2026. As I mentioned, the acquisitions performed exceptionally well. I'm extremely pleased with the execution and pace of improvements. Over the years, we have built tremendous organizational capability that has enabled us to integrate 4 businesses simultaneously at speed and with zero disruption to the core businesses.

Speaker #3: We remain focused on execution, continuing to build on our momentum, and finding potential opportunities to over-deliver. Across the organization, we continue to stay agile in a dynamic environment.

Speaker #3: This performance reinforces the strength of CBS and the opportunity to create meaningful shareholder value, through continued discipline, inorganic growth, combined with the power of the CBS machine.

Speaker #3: Our deep management teams have been here before. And we will manage with the cadence and discipline execution of all come to expect from Crane.

Speaker #3: Having fun, at the start of the year. Strong operational execution, restructuring cost actions, and early commercial excellence momentum drove a majority of the reinforcing our confidence in the quality of the business and our integration playbook.

Speaker #3: Now, some thoughts on the performance of the recent acquisitions and the segments in the quarter, and as we look to the balance of 2026.

Speaker #3: As I mentioned, the acquisitions performed exceptionally well. I'm extremely pleased with the execution and pace of improvements. Over the years, we have built tremendous organizational capability that has enabled us to integrate four businesses, simultaneously.

Speaker #3: Margins across the acquired businesses were substantially improved from last year, and ahead of our plan. And we see opportunity for continued progression in the quarter ahead.

Speaker #3: At speed. And with zero disruption to the core businesses. This performance reinforced the opportunity to create meaningful shareholder value, through continued discipline in organic growth, combined with the power of the CBS machine.

Speaker #3: Earnings contribution from the acquisitions to be more evenly weighted throughout the year, compared to our prior expectation of backup-weighted performance. Based on what we're seeing today, we now what we communicate in January.

Alejandro Alcala: This performance re-opportunity to create meaningful shareholder value through continued discipline inorganic growth, combined with the power of the CBS machine. The teams are energized, having fun, and are driving results better than our expectations at the start of the year. Strong operational execution, restructuring cost actions, and early commercial excellence momentum drove a majority of the upside relative to our January guidance, reinforcing our confidence in both the quality of the businesses and our integration playbook. Margins across the acquired businesses were substantially improved from last year and ahead of our plan. We see opportunity for continued progression in the quarters ahead. More specifically, we now expect the margin and earnings contribution from the acquisitions to be more evenly weighted throughout the year compared to our prior expectation of back-half-weighted performance.

Alejandro Alex Alcala: This performance re-opportunity to create meaningful shareholder value through continued discipline inorganic growth, combined with the power of the CBS machine. The teams are energized, having fun, and are driving results better than our expectations at the start of the year. Strong operational execution, restructuring cost actions, and early commercial excellence momentum drove a majority of the upside relative to our January guidance, reinforcing our confidence in both the quality of the businesses and our integration playbook. Margins across the acquired businesses were substantially improved from last year and ahead of our plan. We see opportunity for continued progression in the quarters ahead. More specifically, we now expect the margin and earnings contribution from the acquisitions to be more evenly weighted throughout the year compared to our prior expectation of back-half-weighted performance.

Speaker #3: The teams are energized, having fun, and are driving results better than our expectations at the start of the year. Strong operational execution, restructuring cost actions, and early commercial excellence momentum drove a majority of the upside relative to our January guidance.

Speaker #3: We're up 15 cents of EPS. And my confidence in exceeding our target ROIC by year five has only increased, over the last few months.

Speaker #3: I'm so proud of all our new associates this year. I'm excited to see what we continue in the future. We are already moving beyond just the tactical integration actions and are well.

Speaker #3: Reinforcing our confidence in both the quality of the businesses and our integration playbook. Margins across the acquired businesses were substantially improved from last year, and ahead of our plan.

Speaker #3: And we see opportunity for continued progression in the quarters ahead. More specifically, we now expect the margin and earnings contribution from the acquisitions to be more evenly weighted throughout the year, compared to our prior expectation of back half-weighted performance.

Speaker #3: I'm very exciting future for everyone. Including our strength across the aerospace and defense demand environment. The backlog we've built along with the new programs and opportunities our aerospace and advanced technology teams have secured, continue to provide us with great to expect full-year core sales growth for the segment to land at the high end of our long-term seven to nine percent range.

Speaker #3: Based on what we're seeing today, we now expect accretion for the full year to be at least double what we communicated in January. We're at about $0.15 of EPS.

Alejandro Alcala: Based on what we're seeing today, we now expect accretion for the full year to be at least double what we communicated in January, or about $0.15 of EPS. My confidence in exceeding our target ROIC by year five has only increased over the last few months. I'm so proud of all our new associates that have joined Crane this year, and I'm excited to see where we will continue to take these outstanding brands in the future. We are already moving beyond just the tactical integration actions and are well on our way with strategy deployment, painting a very exciting future for everyone, including our shareholders. Turning to Aerospace & Advanced Technologies, we continue to see strength across the aerospace and defense demand environment.

Alejandro Alex Alcala: Based on what we're seeing today, we now expect accretion for the full year to be at least double what we communicated in January, or about $0.15 of EPS. My confidence in exceeding our target ROIC by year five has only increased over the last few months. I'm so proud of all our new associates that have joined Crane this year, and I'm excited to see where we will continue to take these outstanding brands in the future. We are already moving beyond just the tactical integration actions and are well on our way with strategy deployment, painting a very exciting future for everyone, including our shareholders. Turning to Aerospace & Advanced Technologies, we continue to see strength across the aerospace and defense demand environment.

Speaker #3: And my confidence in exceeding our target ROIC year five has only increased, over the last few months. I'm so proud of all our new associates that have joined Crane this year.

Speaker #3: On the commercial side, OE activity remains healthy, due to unfair year-over-year comparisons, while commercial aftermarket orders were up 11% in the quarter. While we haven't seen an impact to orders at this time, the Middle East, we could see an impact to commercial aftermarket as the year progresses.

Speaker #3: Excited to see where we will continue to take these outstanding brands in the future. We are already moving beyond just the tactical integration actions and are well on our way with strategy deployment.

Speaker #3: Painting a very exciting future for everyone. Shareholders. Turning to aerospace and advanced technologies. We continue to see strength across the aerospace and defense demand environment.

Speaker #3: The backlog we've built along with the new programs and opportunities our aerospace and advanced technology teams have secured continue to provide us with great visibility well beyond 2026.

Speaker #3: However, evening factoring in a decline in commercial aftermarket, we remain confident in our seven to nine percent sales growth. Rich will provide more details on how we're thinking about this.

Alejandro Alcala: The backlog we built, along with the new programs and opportunities our Aerospace & Advanced Technologies teams have secured, continue to provide us with great visibility well beyond 2026. Looking to the balance of the year, we continue to expect full-year core sales growth for the segment to land at the high end of our long-term 7% to 9% range. On the commercial side, OE activity remains healthy, with Boeing continuing with strong production rates. Commercial aftermarket revenue was down as expected quarter due to unfavorable year-over-year comparisons, while commercial aftermarket orders were up 11% in the quarter. We haven't seen an impact to orders at this time, given the geopolitical situation, elevated oil prices, and long-haul travel disruption through the Middle East, we could see an impact to commercial aftermarket as the year progresses.

Alejandro Alex Alcala: The backlog we built, along with the new programs and opportunities our Aerospace & Advanced Technologies teams have secured, continue to provide us with great visibility well beyond 2026. Looking to the balance of the year, we continue to expect full-year core sales growth for the segment to land at the high end of our long-term 7% to 9% range. On the commercial side, OE activity remains healthy, with Boeing continuing with strong production rates. Commercial aftermarket revenue was down as expected quarter due to unfavorable year-over-year comparisons, while commercial aftermarket orders were up 11% in the quarter. We haven't seen an impact to orders at this time, given the geopolitical situation, elevated oil prices, and long-haul travel disruption through the Middle East, we could see an impact to commercial aftermarket as the year progresses.

Speaker #3: Looking to the balance of the year, we continue to expect full-year core sales growth for the segment to land at the high end of our long-term 7 to 9 percent.

Speaker #3: On the commercial side, OEE activity remains healthy, with Boeing continuing with strong production rates. Commercial aftermarket revenue was down as expected on favorable year-over-year comparisons, while commercial aftermarket orders were 7 percent in the quarter.

Speaker #3: On the defense side, a lot of activity and interesting industry announcements over the past few weeks. There's a continued focus on given the heightened global uncertainty we continue to see.

Speaker #3: We're seeing significant demand signals across both missile defense and radar applications, among other areas in our portfolio. With potential. In the quarter, we received strong orders for the PAC-3 program and remain under negotiations for similar wins.

Speaker #3: While we haven't seen an impact to orders at this time, given the geopolitical situation, elevated oil prices and long-haul travel disruption through the Middle East, we could see an impact to commercial aftermarket as the year progresses.

Speaker #3: However, evening factoring in a decline in commercial aftermarket, we remain confident in our 7 to 9 percent sales growth range leveraging at 35 to 40 percent.

Speaker #3: Additionally, we received orders for LTAMS for additional contracts with other providers. We fully anticipate additional orders in these two defense growth areas as we move through the year.

Alejandro Alcala: However, even factoring in a decline in commercial aftermarket, we remain confident in our 7% to 9% sales growth range, leveraging at 35% to 40%. Rich will provide more details on how we're thinking about this. On the defense side, a lot of activity and interesting industry announcements over the past few weeks. Procurement spending remains solid, and there's a continued focus on strengthening the broader defense industrial base, given the heightened global uncertainty we continue to see. We're seeing significant demand signals across both missile defense and radar applications, among other areas in our portfolio, further strengthening the long-term outlook, with the potential for some benefit this year, depending on order timing and lead times. In the quarter, we remain under negotiations for similar wins. Additionally, we received incremental orders for LTAMDS, and are currently under negotiations for additional contracts with other providers.

Alejandro Alex Alcala: However, even factoring in a decline in commercial aftermarket, we remain confident in our 7% to 9% sales growth range, leveraging at 35% to 40%. Rich will provide more details on how we're thinking about this. On the defense side, a lot of activity and interesting industry announcements over the past few weeks. Procurement spending remains solid, and there's a continued focus on strengthening the broader defense industrial base, given the heightened global uncertainty we continue to see. We're seeing significant demand signals across both missile defense and radar applications, among other areas in our portfolio, further strengthening the long-term outlook, with the potential for some benefit this year, depending on order timing and lead times. In the quarter, we remain under negotiations for similar wins. Additionally, we received incremental orders for LTAMDS, and are currently under negotiations for additional contracts with other providers.

Speaker #3: Rich will provide more details on how we're thinking about on the defense side, a lot of activity and interesting industry announcements over the past few weeks.

Speaker #3: And beyond this, we continue to pursue additional opportunities across market growth for the rest of the decade. Particularly on the defense side, we expect replenishment of military aircraft spares and missiles, along with continued demand for ground-based strong demand for years.

Speaker #3: Procurement spending remains solid, and there's a continued focus on strengthening the prior to defense industrial base given the heightened global uncertainty we continue to see.

Speaker #3: We are seeing significant demand signals across both missile defense and radar applications, among other areas in our portfolio. Further strengthening the long-term outlook. With the potential for some benefit this year, depending on order timing and lead times.

Speaker #3: For another outstanding year at aerospace and advanced technologies. At process flow technologies, another solid quarter and we remain well positioned to. We have in markets pharmaceuticals, wastewater, cryogenics, chemicals, and nuclear power.

Speaker #3: In the quarter, and remain under negotiations for similar wins. Additionally, we received incremental orders for LTAMs, and are currently under negotiations for additional contracts with other providers.

Speaker #3: We fully anticipate additional orders in these two defense growth areas as we move through the year. And beyond this, we continue to develop new technologies, win new business, and pursue additional opportunities across this segment that give us confidence we will deliver above-market growth for the rest of the decade.

Speaker #3: Where we hold strong competitive positions and differentiated capabilities that support sustainable markets. Overall demand for the quarter and execution was strong. Driving a 50 basis point improvement in adjusted margins even with the diluted impact of acquisition.

Alejandro Alcala: We fully anticipate additional orders in these two defense growth areas as we move through the year. Beyond this, we continue to develop new technologies, win new business, and pursue additional opportunities across the segment that gives us confidence we will deliver above-market growth for the rest of the decade. Particularly on the defense side, we expect replenishment of military aircraft spares and missiles, along with continued demand for ground-based radar systems, all extending the period of strong demand for years. Very confident for yet another outstanding year at Aerospace & Advanced Technologies. At Process Flow Technologies, another solid quarter, and we remain well positioned to consistently outgrow our markets across the cycles. We have deliberately repositioned the portfolio around our core end markets, pharmaceuticals, wastewater, cryogenics, chemicals, and nuclear power, where we hold strong competitive positions and differentiated capabilities that support sustainable market outperformance.

Alejandro Alex Alcala: We fully anticipate additional orders in these two defense growth areas as we move through the year. Beyond this, we continue to develop new technologies, win new business, and pursue additional opportunities across the segment that gives us confidence we will deliver above-market growth for the rest of the decade. Particularly on the defense side, we expect replenishment of military aircraft spares and missiles, along with continued demand for ground-based radar systems, all extending the period of strong demand for years. Very confident for yet another outstanding year at Aerospace & Advanced Technologies. At Process Flow Technologies, another solid quarter, and we remain well positioned to consistently outgrow our markets across the cycles. We have deliberately repositioned the portfolio around our core end markets, pharmaceuticals, wastewater, cryogenics, chemicals, and nuclear power, where we hold strong competitive positions and differentiated capabilities that support sustainable market outperformance.

Speaker #3: Particularly on the defense side, we expect replenishment of military aircraft spares and missiles, along with continued demand for ground-based radar systems. All extending the period of strong demand for years.

Speaker #3: On the order side, power generation we also saw solid project expansion. Continued momentum in cryogenics driven by capacity needs within the space launch segment and strong orders in LNG.

Speaker #3: Very confident for yet another outstanding year at aerospace and advanced technologies. At process flow technologies, another solid quarter, and we remain well positioned to consistently outgrow our markets across the cycles.

Speaker #3: In nuclear, as part of the Haltic Palisades note that only about 5% of PFT segment sales are directly exposed to the Middle East. While we're continuing to ship today and overall demand in the region in the moving to the right and potentially along with some shipping lane disruptions.

Speaker #3: We have deliberately repositioned the portfolio around core end markets, pharmaceuticals, wastewater, cryogenics, chemicals, and nuclear power. Where we hold strong competitive positions, and differentiated capabilities that support sustainable market outperformance.

Speaker #3: Overall, demand for the quarter came in slightly ahead of our expectations. And execution was strong. Driving a 50 basis point improvement in adjusted margins even with the dilutive impact of acquisition.

Speaker #3: Notably, we're not seeing cancellations. Longer term, we do see incremental opportunities for rebuilding as the geopolitical environment. And even with this long-term growth through discipline execution of our multi-year technology and new product development roadmaps.

Alejandro Alcala: Overall demand for the quarter came in slightly ahead of our expectations. Execution was strong, driving a 50 basis point improvement in adjusted margins even with the dilutive impact of acquisitions. On the order side, power generation remained a key area of strength. We also saw solid project activity in pharma tied to US capacity expansion, continued momentum in cryogenics driven by capacity needs within the space launch segment, and strong orders in LNG. In nuclear, as part of the Holtec Palisades restart, we're able to add value by extending contract terms. With respect to the ongoing conflict, note that only about 5% of PFT segment sales are directly exposed to the Middle East.

Alejandro Alex Alcala: Overall demand for the quarter came in slightly ahead of our expectations. Execution was strong, driving a 50 basis point improvement in adjusted margins even with the dilutive impact of acquisitions. On the order side, power generation remained a key area of strength. We also saw solid project activity in pharma tied to US capacity expansion, continued momentum in cryogenics driven by capacity needs within the space launch segment, and strong orders in LNG. In nuclear, as part of the Holtec Palisades restart, we're able to add value by extending contract terms. With respect to the ongoing conflict, note that only about 5% of PFT segment sales are directly exposed to the Middle East.

Speaker #3: On the order side, power generation remained a key area of strength. We also saw solid project activity in pharma, tied to U.S. capacity expansion.

Speaker #3: Continued momentum in cryogenics driven by capacity needs, within the space launch segment, and strong orders in LNG. In nuclear, as part of the Holtec Palisades restart, we're able to add value by extending contract terms.

Speaker #3: Along with ongoing commercial excellence initiatives. All supported by strong operational execution. Quickly to changes in demand. We will remain nimble during this period, taking appropriate pricing and cost actions as needed.

Speaker #3: With respect to the ongoing conflict, note that only about 5 percent of PFT segment sales are directly exposed to the Middle East. While we're continuing to ship today an overall demand in the region in the quarter was on track, we do see projects moving to the right and potentially impacting the balance of 2026.

Speaker #3: For the full year, we still expect core growth to be consistent with leveraging within our in summary, a really solid start. Our strategy is unchanged.

Alejandro Alcala: While we're continuing to ship today, and overall demand in the region in the quarter was on track, we do see projects moving to the right and potentially impacting the balance of 2026, along with some shipment lane disruptions. Notably, we're not seeing cancellations. Longer term, we do see incremental opportunities for rebuilding as the geopolitical environment stabilizes. Even with this uncertain backdrop, we continue to invest for long-term growth through disciplined execution of our multi-year technology and new product development roadmaps, along with ongoing commercial excellence initiatives, all supported by strong and consistent operational execution, proving our ability to respond quickly to changes in demand. We will remain nimble during this period, taking appropriate pricing and cost actions as needed.

Alejandro Alex Alcala: While we're continuing to ship today, and overall demand in the region in the quarter was on track, we do see projects moving to the right and potentially impacting the balance of 2026, along with some shipment lane disruptions. Notably, we're not seeing cancellations. Longer term, we do see incremental opportunities for rebuilding as the geopolitical environment stabilizes. Even with this uncertain backdrop, we continue to invest for long-term growth through disciplined execution of our multi-year technology and new product development roadmaps, along with ongoing commercial excellence initiatives, all supported by strong and consistent operational execution, proving our ability to respond quickly to changes in demand. We will remain nimble during this period, taking appropriate pricing and cost actions as needed.

Speaker #3: Along with some shipment lane disruptions. Notably, we're not seeing cancellations. Longer term, we do see incremental opportunities for rebuilding as the geopolitical environment stabilizes.

Speaker #3: And we remain focused on managing through any near-term demand variability without losing sight of our long. Together, our businesses continue delivering strong results. We also continue to see significant opportunity to further enhance performance through acquisitions.

Speaker #3: And even with this uncertain backdrop, we continue to invest for long-term growth through disciplined execution of our multi-year technology and new product development roadmaps.

Speaker #3: Our balance sheet remains exceptionally strong. And we continue to pursue our potential opportunities. M&A activity has not slowed. And we are actively engaged on a number of opportunities across both aerospace and advanced technologies and process flow technologies.

Speaker #3: Along with ongoing commercial excellence initiatives, all supported by strong and consistent operational execution. We've proven our ability to respond quickly to changes in demand. We will remain nimble during this period, taking appropriate pricing and cost actions as needed.

Speaker #3: For the full year, we still expect core growth to be consistent with our initial guidance of flat to low single digits, with leverage within our target range of 30 to 35 percent.

Speaker #3: Our pipeline remains healthy and evaluate potential transactions. Before turning the culvert to Rich, I want to emphasize that while external conditions remain dynamic, our focus has not changed.

Alejandro Alcala: For the full year, we still expect core growth to be consistent with our initial guidance of flat to low single digits, leveraging within our target range of 30% to 35%. In summary, a really solid start. Our strategy is unchanged, and we remain focused on managing through any near-term demand variability without losing sight of our long-term objectives. Taken together, our businesses remain exceptionally well positioned to continue delivering strong results. We also continue to see significant opportunity to further enhance performance through acquisitions. Our balance sheet remains exceptionally strong with substantial available M&A capacity, and we continue to pursue a robust pipeline of potential opportunities. M&A activity has not slowed, and we are actively engaged on a number of opportunities across both Aerospace & Advanced Technologies and Process Flow Technologies.

Alejandro Alex Alcala: For the full year, we still expect core growth to be consistent with our initial guidance of flat to low single digits, leveraging within our target range of 30% to 35%. In summary, a really solid start. Our strategy is unchanged, and we remain focused on managing through any near-term demand variability without losing sight of our long-term objectives. Taken together, our businesses remain exceptionally well positioned to continue delivering strong results. We also continue to see significant opportunity to further enhance performance through acquisitions. Our balance sheet remains exceptionally strong with substantial available M&A capacity, and we continue to pursue a robust pipeline of potential opportunities. M&A activity has not slowed, and we are actively engaged on a number of opportunities across both Aerospace & Advanced Technologies and Process Flow Technologies.

Speaker #3: In summary, a really solid start. Our strategy is unchanged. And we remain focused on managing through any near-term demand variability without losing sight of our long-term objectives.

Speaker #3: Execution, customer and our people and continue to invest in our growth initiatives and technology roadmaps. We believe this approach positions cranes to outperform our end markets and create long-term volatility.

Speaker #3: Taken together, our businesses remain exceptionally well positioned to continue delivering strong results. We also continue to see significant opportunity to further enhance performance through acquisitions.

Speaker #3: Our balance sheet remains exceptionally strong, with substantial available M&A capacity, and we continue to pursue a robust pipeline of potential opportunities. M&A activity has not slowed.

Speaker #3: We will deliver a four to six percent long-term core sales growth through the cycles from resilient and durable businesses with solid aftermarket. Today that should lead to significant upside from capital deployment.

Speaker #3: And we are actively engaged on a number of opportunities across both aerospace and advanced technologies, and process flow technologies. While there is nothing imminent at this point, our pipeline remains healthy.

Speaker #3: And we remain disciplined and selective as we evaluate potential transactions. Before turning the call over to Rich, I want to emphasize that while external conditions remain dynamic, our focus has not changed.

Speaker #3: Now let me turn the call over to our CFO, Mr. Rich Maui, for more specifics on the quarter.

Alejandro Alcala: While there is nothing imminent at this point, our pipeline remains healthy, and we remain disciplined and selective as we evaluate potential transactions. Before turning the call over to Rich, I want to emphasize that while external conditions remain dynamic, our focus has not changed. We remain disciplined in the areas we control: execution, customer focus, cost improvement, development of our people, and continued investment in our growth initiatives and technology roadmaps. We believe this approach positions Crane to outperform our end markets and create long-term shareholder value. Regardless of near-term volatility over the long term, our approach remains consistent. We will deliver a 4% to 6% long-term core sales growth through the cycles from resilient and durable businesses with solid aftermarket. Substantial operating leverage on top of already solid margins today that should lead to double-digit average annual core profit growth with significant offset from capital deployment.

Alejandro Alex Alcala: While there is nothing imminent at this point, our pipeline remains healthy, and we remain disciplined and selective as we evaluate potential transactions. Before turning the call over to Rich, I want to emphasize that while external conditions remain dynamic, our focus has not changed. We remain disciplined in the areas we control: execution, customer focus, cost improvement, development of our people, and continued investment in our growth initiatives and technology roadmaps. We believe this approach positions Crane to outperform our end markets and create long-term shareholder value. Regardless of near-term volatility over the long term, our approach remains consistent. We will deliver a 4% to 6% long-term core sales growth through the cycles from resilient and durable businesses with solid aftermarket. Substantial operating leverage on top of already solid margins today that should lead to double-digit average annual core profit growth with significant offset from capital deployment.

Speaker #2: Thank you. Well, let's start to the year. Let me start off with some results. Total sales were up 25% in the quarter compared to last year with 4% core growth driven primarily by the ongoing strength within the aerospace and advanced technology segment.

Speaker #3: We remain disciplined in the areas we control. Execution, customer focus, cost improvements. Development of our people, and continued investment in our growth initiatives and technology roadmaps.

Speaker #2: Sales from acquisitions contributed 18% in the quarter, which was mostly above expectations. Four new businesses become a part of the crane machine. Adjusted operating profit increased 29%, reflecting the impact of the higher core sales contribution from the acquisitions.

Speaker #3: We believe this approach positions Crane to outperform our end markets and create long-term shareholder value. Regardless of near-term volatility, over the long term, our approach remains consistent.

Speaker #3: We will deliver a four to six percent long-term core sales growth through the cycles, from resilient and durable businesses with solid aftermarket. Substantial operating leverage on top of already solid margins today that should lead to double-digit average annual core profit growth, with significant upside, from capital deployment.

Speaker #2: A truly outstanding result. Backlog was up 9% compared to the first quarter last year, reflecting continued strength at aerospace and advanced technologies. And core backlog was up 3% sequentially, driven primarily by process flow.

Speaker #3: Now let me turn the call over to our CFO, Mr. Rich Maue, for more specifics on the quarter.

Speaker #2: Core orders were down 5%. The decline was entirely driven by an unfavorable comparison within aerospace and advanced technologies, where a 15% decline reflected the record first quarter orders last year in this business.

Speaker #2: Thank you, Alex, and good morning, everyone. Wow, what a start to the year. Let me start off with total company results. Total sales were up 25 percent in the quarter compared to last year, with 4 percent.

Alejandro Alcala: Now let me turn the call over to our CFO, Mr. Richard A. Maue, for more specifics on the quarter.

Alejandro Alex Alcala: Now let me turn the call over to our CFO, Mr. Richard A. Maue, for more specifics on the quarter.

Richard A. Maue: Thank you, Alejandro Alcala, good morning, everyone. Wow, what a start to the year. Let me start off with total company results. Total sales were up 25% in the quarter compared to last year, with 4% core growth driven primarily by the ongoing strength within the aerospace technology segment. Sales from acquisitions contributed 18% in the quarter, which was modestly above expectations, reflecting strong execution as these 4 new businesses become a part of Crane machine. Adjusted operating profit increased 29%, reflecting the impact of the sales, contribution from the acquisitions, and product mix, favorable price net of inflation, a truly outstanding result. Total core FX neutral backlog was up 9% compared to Q1 of last year, reflecting continued strength at Aerospace & Advanced Technologies, and core backlog was up 3% sequentially, driven primarily by Process Flow Technologies.

Richard A. Maue: Thank you, Alejandro Alcala, good morning, everyone. Wow, what a start to the year. Let me start off with total company results. Total sales were up 25% in the quarter compared to last year, with 4% core growth driven primarily by the ongoing strength within the aerospace technology segment. Sales from acquisitions contributed 18% in the quarter, which was modestly above expectations, reflecting strong execution as these four new businesses become a part of Crane machine. Adjusted operating profit increased 29%, reflecting the impact of the sales, contribution from the acquisitions, and product mix, favorable price net of inflation, a truly outstanding result. Total core FX neutral backlog was up 9% compared to Q1 of last year, reflecting continued strength at Aerospace & Advanced Technologies, and core backlog was up 3% sequentially, driven primarily by Process Flow Technologies.

Speaker #2: Which includes several multi-year orders that we highlighted to you. And for backlog in PFT was up 7% compared to December. Backlog and orders across the acquisitions were also solid, coming in modestly above our expectations and strong year outlook.

Speaker #2: Growth, driven primarily by the ongoing strength with acquisitions, contributed 18 percent, which was moderately above expectations. And these four years have become a part of Crane Machine.

Speaker #2: Adjusted operating profit increased 10 percent from the impact of the contribution from the acquisitions. Backlog was up 9 percent compared to the first quarter last year, reflecting continued strength at aerospace and advanced technologies, and core backlog was up 3 percent sequentially, driven primarily by process flow technologies.

Speaker #2: The quarter with proforma net leverage at 1.4 times, leaving us well positioned for further M&A, as Alex noted. A few more details on the segments in the quarter.

Speaker #2: Sales of with core sales up 9.4%. Our backlog of nearly 1.2 billion increased 14% on a core basis and increased 24%, including drug. Core backlog increased 2%.

Speaker #2: Core orders were down 5 percent year over year, but were modestly better than we expected. The decline was entirely driven by an unfavorable comparison within Aerospace and Advanced Technologies, where a 15 percent decline reflected the record first quarter orders last year in this business.

Speaker #2: Which included several multi-year orders that we highlighted to you last April. Core orders in PFT increased 5 percent compared to last year, and core backlog in PFT was up 7 percent compared to December.

Richard A. Maue: Core orders were down 5% year over year, but were modestly better than we expected. The decline was entirely driven by an unfavorable comparison within Aerospace & Advanced Technologies. Where a 15% decline reflected the record Q1 orders last year in this business, which included several multi-year orders that we highlighted to you last April. Core orders in PFT increased 5% compared to last year, and core backlog in PFT was up 7% compared to December. Backlog and orders across the acquisitions were also solid, coming in modestly above our expectations and continuing to support a strong full-year outlook. From a balance sheet perspective, we ended the quarter with pro forma net leverage at 1.4x, leaving us well-positioned for further M&A, as Alejandro Alcala noted. A few more details on the segments in the quarter. Starting with Aerospace & Advanced Technologies.

Speaker #2: Backlog in orders across the acquisitions were also solid, coming in modestly above our expectations, and continuing to support a strong full-year outlook. From a balance sheet perspective, we ended the quarter with pro forma net leverage at 1.4 times, leaving us well positioned for further M&A, as Alex noted.

Speaker #2: Let me spend a minute on the core business in the quarter. On the OEM side, sales were strong, up 16% with commercial OEM up 20% and total aftermarket was down posting a very strong increase, up 28% in the quarter, reflecting the breadth and strength of our portfolio.

Speaker #2: A few more details on the segments in the quarter, starting with Aerospace & Advanced Technologies. Sales of $318 million increased 28 percent in the quarter.

Speaker #2: That military strength was offset by commercial aftermarket, which was down 13%. Specific to commercial aftermarket shipment, but with an unfavorable comparison against higher initial provisioning in the prior year first quarter.

Speaker #2: With core sales up 9.4 percent. Our backlog of nearly 1.2. On a core basis, and increased 24 percent, including DRUC. On a sequential basis, core backlog increased 2 percent, with total backlog up 11 percent.

Speaker #2: Even with that decline, we came in above our growth expectations for the quarter. Of note, commercial aftermarket over year and 10%. While we haven't seen any impacts to orders so far, resulting from the ongoing conflict, elevated oil prices and disruptions to long-haul travel through the Middle East could create pressure on commercial aftermarket as the year progresses.

Richard A. Maue: Sales of $318 million increased 28% in the quarter, with core sales up 9.4%. Our backlog of nearly $1.2 on a core basis and increased 24%, including Druck. On a sequential basis, core backlog increased 2% with total backlog up 11%. Again, no surprises and at record levels. Demand remains strong. We are seeing increasing RFP and RFQ activities across several defense programs supporting missile defense and ground-based radar, some of which reflect recent wins at some of our defense customers, giving us further confidence in our multi-year outlook. Let me spend a minute on the core business in the quarter. On the OEM side, sales were strong, up 16%, with commercial OEM up 10%.

Speaker #2: Again, no surprises and at record levels. Demand remains strong. We are seeing increasing RFP and RFQ activities across several defense programs, supporting missile defense and ground-based radar, some of which reflect recent wins at some of our defense customers, giving us further confidence in our multi-year outlook.

Speaker #2: Let me spend a minute on the core business in the quarter. On the OEM side, sales were strong, up 16 percent, with commercial OEM up 10 percent.

Speaker #2: Commercial aftermarket could. Taken all together, though, we remain very confident in our full year segment sales outlook. We continue to expect total core sales growth at the high end of our seven to nine percent algorithm.

Speaker #2: Total aftermarket was down 2 percent in the quarter, with military aftermarket posting a very strong increase, up 28 percent in the quarter, reflecting the breadth and strength of our portfolio.

Speaker #2: The year plays out, our really speaks to the diversity and durability of our aerospace and advanced technologies portfolio. Adjusted segment margin of 24.6% compared to 22% last year, primarily reflecting the impact of the drug.

Speaker #2: That military strength was offset by commercial aftermarket, which was down 13 percent, as expected. Specific to commercial aftermarket, shipments were largely in line with what we expected for Q1, but with an unfavorable comparison against higher initial provisioning in the prior year first quarter, even with that decline we came in above our growth expectations for the quarter.

Richard A. Maue: Total aftermarket was down 2% in the quarter, with military aftermarket posting a very strong increase, up 28% in the quarter, reflecting the breadth and strength of our portfolio. That military strength was offset by commercial aftermarket, which was down 13% as expected. Specific to commercial aftermarket, shipments were largely in line with what we expected for Q1, but with an unfavorable comparison against higher initial provisioning in the prior year Q1. Even with that decline, we came in above our growth expectations for the quarter. Of note, commercial aftermarket orders in the quarter were up 11% year over year and 10% sequentially. While we haven't seen any impacts to orders so far resulting from the ongoing conflict, elevated oil prices and disruptions to long-haul travel through the Middle East could create pressure on commercial aftermarket as the year progresses.

Speaker #2: Results and nearly 200 basis points better than we expected. Given drug outperformance in the quarter, as well as continued strong performance in our core A&E business.

Speaker #2: Of note, commercial aftermarket orders in the quarter were up 11 percent year over year, and 10 percent sequentially. While we haven't seen any impacts to orders so far, resulting from the ongoing conflict, elevated oil prices and disruptions to long-haul travel through the Middle East could create pressure on commercial aftermarket as the year progresses.

Speaker #2: In Q1, we delivered compared to a year ago. With core sales down 0.6%, slightly better than we anticipated, with the acquisitions of Panametrics, Reuters, Stokes, and Optech down a lot, adding 19 points of growth.

Speaker #2: We are factoring into our guidance that commercial aftermarket could decline on a full-year basis. Together, though, we remain very confident in our full-year segment sales outlook.

Speaker #2: We continue to expect total core sales growth at the high end of our 7% to 9% algorithm. While the mix across subsegments may shift as the year plays out, our overall guidance is unchanged, and that really speaks to the diversity and durability of our aerospace and advanced.

Speaker #2: PFT decreased 2.5%, but on a sequential basis improved a solid 7%. In addition, core FX neutral orders were up 5%, also adjusted. 50 basis points above the prior year, and this was inclusive of the dilutive impact from the recent acquisitions.

Richard A. Maue: We are factoring into our guidance that commercial aftermarket could decline on a full-year basis. Together, though, we remain very confident in our full-year segment sales outlook. We continue to expect total core sales growth at the high end of our 7% to 9% algorithm. While the mix across sub-segments may shift as the year plays out, our overall guidance is unchanged, and that really speaks to the diversity and durability of our Aerospace & Advanced Technologies. Adjusted segment margin of 24.6% compared to 26.2% last year, primarily reflecting the impact of the Druck acquisition. This was an outstanding result and nearly 200 basis points better than we expected, given Druck outperformance in the quarter, as well as continued strong performance in our core Aerospace & Electronics business.

Speaker #2: Adjusted segment margin of 24.6 percent compared to 26.2 percent last year, primarily reflecting the impact of the DRUC acquisition. This was an outstanding result and nearly 200 basis points better than we expected.

Speaker #2: And like aerospace and advanced technologies, results were above our expectations given better performance and each acquired as well as price net cost. In the quarter, the impact from the conflict in the Middle East was nominal, as Alex mentioned, we have just under 5% of total exposure in region on a full year basis.

Speaker #2: Given DRUC outperformance in the quarter, as well as continued strong performance in our core A&E business. At process flow technologies, in Q1 we delivered sales of $378 million, up 23 percent compared to a year ago, with core sales down 0.6 percent, slightly better than we anticipated, with the acquisitions of Panametrics, Reuters Stokes, and Optech Danielot adding 19 points of growth.

Speaker #2: Notable freight and other inflation. Our teams are already executing to ensure no net inflation risk to the P&L. Inclusive of margin impacts. In summary, we continue to expect core operating leverage for the segment.

Speaker #2: And FX contributed 4 points of growth in the quarter. Compared to the prior, FX neutral backlog at PFT decreased 2.5 percent, but on a sequential basis, improved a solid 7 percent.

Richard A. Maue: At Process Flow Technologies, in Q1, we delivered sales of $378 million, up 23% compared to a year ago, with core sales down 0.6%, slightly better than we anticipated, with the acquisitions of Panametrics, Reuter-Stokes, and optek-Danulat adding 19 points of growth. FX contributed 4 points of growth in the quarter. Compared to the prior year, FX neutral backlog at PFT decreased 2.5%. On a sequential basis, it improved a solid 7%. In addition, core FX neutral orders were up 5%, also modestly above our expectations. Adjusted operating margin of 22.1% was approximately 50 basis points above the prior year. This was inclusive of the dilutive impact from the recent acquisitions. Like Aerospace & Advanced Technologies, results were above our expectations, given better performance across our core businesses and each acquired business.

Speaker #2: In addition, core FX neutral orders were up 5 percent, also moderately above our expectations. Adjusted operating margin of 22.1 percent was approximately 50 basis points above the prior year, and this was inclusive of the dilutive impact from the recent acquisitions.

Speaker #2: Corporate expense for the quarter was 24 million, slightly lower than our expectations. Recall, we anticipated corporate expense to be highest in Q1, stock-based compensation expense.

Speaker #2: And like aerospace and advanced technologies, results expectations given better performance across our core businesses and each acquired business. Productivity is reading through, as well as price net cost.

Speaker #2: For 2026, we continue to forecast corporate expense to be in the range of 80 to 85 million. Given the funding for the acquisitions of Panametrics, Drug, Reuters, Stokes, and operating expense the quarter was 50 million and we continue to estimate full year 2026 net non-operating expense.

Speaker #2: In the quarter, the impact from the conflict in the Middle East was nominal, as Alex mentioned. We have just under 5 percent of total exposure in region on a full-year basis.

Speaker #2: Of approximately 58 million. And lastly, we continue to expect our tax rate for 2026 to approximate 23%. Taking all of this into account, our performance today is, as Alex mentioned, we are raising our adjusted full year guidance by 10 cents.

Speaker #2: We expect projects to move to the right, and we do expect notable freight and operationary headwinds as we move through the balance of 2026.

Richard A. Maue: Productivity is reading through as well as price net cost. In the quarter, the impact from the conflict in the Middle East was nominal, as Alejandro Alcala mentioned. We have just under 5% of total exposure in region on a full year basis. We expect projects to move to the right, we do expect notable freight and other inflationary headwinds as we move through the balance of 2026. Our teams are already executing to ensure no net inflation risk to the P&L, inclusive of margin. In summary, we continue to expect core operating leverage for the segment between 30% to 35% for the full year. Moving to the non-operational items below the segments. Corporate expense for the quarter was $24 million, slightly lower than our expectations.

Speaker #2: Our teams are already executing to ensure no net inflation risk to the P&L, inclusive of margin. In summary, we continue to expect core operating leverage for the segment between 30% to 35% for the full year.

Speaker #2: To a range of 665 to 685. Again, reflecting what we have clear line of sight to in a high level of confidence in delivery.

Speaker #2: Moving to the non-operational items below the segments. Corporate expense for the quarter was $24 million, slightly lower than our expectations. Recall, we anticipated corporate expense to be highest in Q1 due to accounting rules that require accelerated amortization of stock-based compensation expense.

Speaker #2: Looking at cases of quarterly results for the year, and our full year earnings split to now be more balanced at around 49% to 51% between the first and second half, given the strong Q1 performance.

Speaker #2: For associates that are retirement eligible. For 2026, we continue to forecast corporate $25 million. Given the funding for the acquisitions of Panametrics, DRUC, Reuters Stokes, and Optech Danielot, net non-operating expense in the quarter was $15 million, and we continue to estimate full year 2026 net non-operating expense of approximately $58 million.

Speaker #2: More evenly balanced relative to our Q3 to Q4. Given the expected performance of our recent acquisitions. We begin the year with performance that exceeded our expectations, underscoring the strength of our execution.

Richard A. Maue: Recall, we anticipated corporate expense to be highest in Q1 due to accounting rules that require accelerated amortization of stock-based compensation expense for associates that are retirement eligible. For 2026, we continue to forecast corporate $5 million. Given the funding for the acquisitions of Panametrics, Druck, Reuter-Stokes, and optek-Danulat, net non-operating expense in the quarter was $15 million, and we continue to estimate full-year 2026 net non-operating expense of approximately $58 million.

Richard A. Maue: Recal`l, we anticipated corporate expense to be highest in Q1 due to accounting rules that require accelerated amortization of stock-based compensation expense for associates that are retirement eligible. For 2026, we continue to forecast corporate $5 million. Given the funding for the acquisitions of Panametrics, Druck, Reuter-Stokes, and optek-Danulat, net non-operating expense in the quarter was $15 million, and we continue to estimate full-year 2026 net non-operating expense of approximately $58 million.

Speaker #2: We remain committed to delivering results. You know, Alex, all the uncertainty that everyone is talking about this earnings season reminded me of a notable quote from the Academy Award-winning actor Ryan Reynolds.

Speaker #2: And lastly, we continue to expect our tax rate for 2026 to approximate 23 percent. Taking all of this into account, our performance to date, as well as the risks and opportunities we see ahead, as Alex mentioned, we are raising our adjusted full-year guidance by 10 cents to a range of 665 to 685.

Speaker #2: Van Wilder. Give you something to do, but it doesn't get you anywhere. At Crane, leveraging our CBS machine, we are very intentional and focused on what's in our control no matter what the environment.

Speaker #2: Again, reflecting what we have clear line of sight to in a high level of confidence in delivering. Looking at the cadence of quarterly results for the year, we expect Q2 to be similar to Q1, and our full-year earnings split to now be more balanced at around 49 percent to 51 percent between the first and second half, given the strong Q1 performance.

Alejandro Alcala: Lastly, we continue to expect our tax rate for 2026 to approximate 23%. Taking all of this into account, our performance to date, as well as the risks and opportunities we see ahead, as Alex mentioned, we are raising our adjusted full year guidance by $0.10 to a range of $6.65 to $6.85. Again, reflecting what we have clear line of sight to and a high level of confidence in delivering. Looking at the cadence of quarterly results for the year, we expect Q2 to be similar to Q1 and our full year earnings split to now be more balanced at around 49% to 51% between H1 and H2 given the strong Q1 performance.

Richard A. Maue: Lastly, we continue to expect our tax rate for 2026 to approximate 23%. Taking all of this into account, our performance to date, as well as the risks and opportunities we see ahead, as Alex mentioned, we are raising our adjusted full year guidance by $0.10 to a range of $6.65 to $6.85. Again, reflecting what we have clear line of sight to and a high level of confidence in delivering. Looking at the cadence of quarterly results for the year, we expect Q2 to be similar to Q1 and our full year earnings split to now be more balanced at around 49% to 51% between H1 and H2 given the strong Q1 performance.

Speaker #2: We always periods of opportunity. Ready to take our first question.

Speaker #1: Thank you. The floor is now open for questions. At this time, if you have a question or a comment, please press star one on your telephone keypad.

Speaker #2: The second half earnings performance is expected to be more evenly balanced relative to our historical quarterly cadence of a sequential decline from Q3 to Q4, given the expected performance of our recent acquisitions.

Speaker #1: If at any point your question is answered, you again, we ask you to pick up your hand. Thank you. And we'll take our first question from Amit Metrotra.

Speaker #2: We began the year with performance that exceeded our expectations, underscoring the strength of our teams, our strategic direction, and our execution. We remain committed to building on that momentum and consistently delivering results.

Speaker #1: Please go ahead. Your line is open.

Speaker #3: Thanks, operator. Good morning. I wish I had a good movie quote, but I'll have to come up. Starting maybe starting very, very strong and clear.

Alejandro Alcala: The H2 earnings performance is expected to be more evenly balanced relative to our historical quarterly cadence of a sequential decline from Q3 to Q4, given the expected performance of our recent acquisitions. We began the year with performance that exceeded our expectations, underscoring the strength of our teams, our strategic direction, and our execution. We remain committed to building on that momentum and consistently delivering results. You know, Alex, all the uncertainty that everyone is talking about this earnings season reminded me of a notable quote from the Academy Award-winning actor, Ryan Reynolds, from the timeless movie classic, National Lampoon's Van Wilder. "Worrying is like a rocking chair.

Richard A. Maue: The H2 earnings performance is expected to be more evenly balanced relative to our historical quarterly cadence of a sequential decline from Q3 to Q4, given the expected performance of our recent acquisitions. We began the year with performance that exceeded our expectations, underscoring the strength of our teams, our strategic direction, and our execution. We remain committed to building on that momentum and consistently delivering results. You know, Alex, all the uncertainty that everyone is talking about this earnings season reminded me of a notable quote from the Academy Award-winning actor, Ryan Reynolds, from the timeless movie classic, National Lampoon's Van Wilder. "Worrying is like a rocking chair.

Speaker #2: You know, Alex, all the uncertainty that everyone is talking about this earnings season reminded me of a notable quote from the Academy Award-winning actor Ryan Reynolds.

Speaker #3: Maybe just unpack where the upside is coming from across drug, Panametrics, Reuters, Stokes. Obviously, you've had this target of getting from 60 million to 150.

Speaker #2: From the timeless movie classic National Lampoon's Van Wilder, worrying is like a rocking chair. It gives you something to do, but it doesn't get you anywhere.

Speaker #3: It seems like you're faster. Maybe you can just update us on timing with respect to that. Progression.

Speaker #2: At Crane, leveraging our CBS machine, we are very intentional and focused on what's in our control, no matter what the environment, and we always view periods of uncertainty as periods of opportunity.

Speaker #4: Yeah. Good morning, Amit. Thank you for that question. So related to PSI, the quarter upside, I mentioned three areas: stronger than expected, just execution has been very solid.

Speaker #2: And with that, operator, we are now ready to take our first question.

Speaker #1: Thank you. The floor is now open for questions. At this time, if you have a question or a comment, please press star one on your telephone keypad.

Alejandro Alcala: It gives you something to do, but it doesn't get you anywhere. At Crane, leveraging our CBS machine, we are very intentional and focused on what's in our control no matter what the environment, and we always view periods of uncertainty as periods of opportunity. With that, operator, we are now ready to take our first question.

Richard A. Maue: It gives you something to do, but it doesn't get you anywhere. At Crane, leveraging our CBS machine, we are very intentional and focused on what's in our control no matter what the environment, and we always view periods of uncertainty as periods of opportunity. With that, operator, we are now ready to take our first question.

Speaker #4: So that created some upside. The cost actions, you may recall that we're taking two types of cost actions. In the short term, one is eliminated the layer management layer, really operating very well.

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

Speaker #1: Thank you. And we'll take our first question from Metrotra. Please go ahead. Your line is open.

Speaker #4: And then within the businesses, as we're executing product line simplification, there's realignment also of resources and restructuring. So we moved teams moved quite quickly in the quarter and we started to see the beginnings of that are starting to read through as we move to also a great speed.

Operator: Thank you. The floor is now open for questions. At this time, if you have a question or a 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 you pick up your handset when posing your questions to provide optimal sound quality. Thank you. We'll take our first question from Amit Mehrotra. Please go ahead, your line is open.

Speaker #3: Thanks, operator. Good morning. I wish I had a good movie quote, but I'll have to come up with one next quarter. Maybe starting with the progress you're making on PSI, which is obviously very, very strong and clear.

Speaker #3: Maybe just unpack where the upside is coming from across drug and Reuters Stokes. And obviously, the target of getting from 60 million to 150 over five years to hit that ROI target.

Speaker #4: Expect that to improve during the year. Related to timing, overall, so this year the PSI set up a range of four to six percent on the growth.

Amit Mehrotra: Thanks, operator. Good morning. I wish I had a good movie quote, but I'll have to come up with one next quarter. Maybe starting with the progress you're making on PSI, which is obviously very, very strong and clear, maybe just unpack where the upside's coming from across Druck, Panametrics, Reuter-Stokes. Obviously you've had this target of getting from $60 million to $150 over five years to hit that ROI target. It seems like you're achieving that greater or even faster. Maybe you can just update us on timing with respect to that progression.

Speaker #3: It seems like you're achieving that greater or even faster, or maybe you can just update us on timing with respect to that. Progression.

Speaker #4: Yeah. Good morning, Ahmed. Thank you for that. So related to PSI, the quarter upside, I mentioned three areas: first, the execution of the three businesses was strong volume standpoint, demand is stronger execution has been very solid.

Speaker #4: We're now thinking closer to the higher side of that range. And we were thinking we would improve 200 basis points of margin and now we're thinking so ahead of schedule of our plan, which puts us overall in that five-year timeline really gaining ground.

Speaker #4: So that created some upside. The cost actions, you may recall that were taken two types of cost actions. In the short term, one is eliminated the overall PSI layer management layer.

Speaker #4: So very confident and over delivering. To those benchmarks.

Alejandro Alcala: Good morning, Amit. Thank you for that. Related to PSI, the quarter upside, I mentioned three areas. First, the execution of the three businesses was strong. Volume standpoint, demand is strong. Our execution has been very solid, so that created some upside. The cost actions. You may recall that we're taking two types of cost actions in the short term. One is eliminated the overall PSI layer, management layer. We're really operating these as three businesses, so that was executed very well. Within the businesses, as we're executing product line simplification, there's realignment also of resources and restructuring. We moved teams moved quite quickly in the quarter and we started. Excellent that are starting to read through as we moved also at great speed.

Alejandro Alex Alcala: Good morning, Amit. Thank you for that. Related to PSI, the quarter upside, I mentioned three areas. First, the execution of the three businesses was strong. Volume standpoint, demand is strong. Our execution has been very solid, so that created some upside. The cost actions. You may recall that we're taking two types of cost actions in the short term. One is eliminated the overall PSI layer, management layer. We're really operating these as three businesses, so that was executed very well. Within the businesses, as we're executing product line simplification, there's realignment also of resources and restructuring. We moved teams moved quite quickly in the quarter and we started. Excellent that are starting to read through as we moved also at great speed.

Speaker #3: Great. Great. Thank you for that. And just maybe talk about PFT core order improvement. Is it enough to sort of call an inflection in the process flow cycle where you're seeing the strongest momentum across?

Speaker #4: We're really operating these as three businesses. So that was executed very well. And then within the businesses, as we're executing product line simplification, there's realignment also of resources and restructuring.

Speaker #4: So we moved teams moved quite quickly in the quarter, and we started development is the beginnings to excellence. That are starting to read through as we move to also at great speed.

Speaker #3: Obviously, you're in various regions and various end markets. Maybe you could just double-click on that.

Speaker #4: The strength is common in some markets that we've been highlighting. In the past, that's continued. I think that will continue through the year. So power, power generation in Americas, pharmaceuticals, wastewater in particular, so that's been pretty consistent.

Speaker #4: Expect that to improve during the year. Related to timing, overall, so this year, we came in thinking on the top line the PSI set of businesses would be in the range of four to six percent on the growth.

Speaker #4: We’re now thinking closer to the higher end, and we were thinking we would improve 200 basis points of margin, and now 300 basis points of margin.

Speaker #4: Interestingly, we don't see those segments impacted by the higher energy prices. So we think demand will remain solid through the year. Chemical at a trough, but I would call it a an inflection point yet until we see that piece of the business changing.

Alejandro Alcala: I expect that to improve during the year. Related to timing overall, this year we came in thinking on the top line, the PSI set of businesses would be in the range of 4% to 6% on the growth. We're now thinking closer to the high. We were thinking we would improve 200 basis points of margin and now 300 basis points of margin. Ahead of schedule of our plan, which, you know, puts us overall in that 5-year timeline really gaining ground. Very confident and over-delivering to those benchmarks.

Alejandro Alex Alcala: I expect that to improve during the year. Related to timing overall, this year we came in thinking on the top line, the PSI set of businesses would be in the range of 4% to 6% on the growth. We're now thinking closer to the high. We were thinking we would improve 200 basis points of margin and now 300 basis points of margin. Ahead of schedule of our plan, which, you know, puts us overall in that five-year timeline really gaining ground. Very confident and over-delivering to those benchmarks.

Speaker #4: So ahead of schedule of our plan, which puts us overall in that five-year timeline, really gaining ground. So very confident and over delivering to those benchmarks.

Speaker #4: Now, historically, higher energy prices have led to increased demand that takes a while to read through. The customer sees that benefit of feedstock between gas and oil.

Speaker #3: Great. Great. Thank you for that. And just maybe as a follow-up, can we talk about PFT core order improvement? Obviously, very, very strong sequentially.

Speaker #3: Is it enough to sort of call an inflection in the process flow cycle, where you're seeing the strongest momentum across? Obviously, you're in various regions and various end markets.

Speaker #4: And even though in demand and customer demand for their customers may be slower and expand capacity, debottom making and so forth. So I think solid not quite calling an inflection, especially on the chemical, but definitely better than we expected going into the year and appreciate it.

Speaker #3: Maybe you could just double-click on that in terms of what you're seeing that momentum.

Amit Mehrotra: Great. Thank you for that. Just maybe as a follow-up, can we talk about PFT core order improvement? Obviously very, very strong sequentially. Is it enough to sort of call an inflection in the, you know, the process flow cycle? Where are you seeing the strongest momentum across, obviously, your various regions and various end markets? Maybe you could just double-click on that in terms of where you're seeing that momentum.

Speaker #4: Yeah. So in the question of orders for PFT, the strength is common in some markets that we've been highlighting. In the past, that's continued.

Speaker #4: I think that will continue through the year. So, power, power generation in the Americas, pharmaceuticals, cryogenics, and wastewater in particular gave us the upside. So, that's been pretty.

Speaker #4: Thank you, Amit.

Speaker #1: Thank you. We'll take our next question from Matt Somerville of DA Davidson. Please go ahead. Your line is open.

Speaker #4: Consistent interestingly, we don't see those segments impacted by the higher energy prices. So we think demand will remain solid through the year. Chemical has continued to be sluggish at a trough holding.

Alejandro Alcala: Yeah. On the question of orders for PFT, the strength has come in some markets that we've been highlighting in the past, that's continued. I think that will continue through the year. Power generation in Americas, pharmaceuticals, cryogenics, and wastewater in particular, gave us the upside. That's been pretty consistent. Interestingly, we don't see those segments impacted by the higher energy prices, so we think demand will remain solid through the year. Chemical has continued to be sluggish at a trough, holding. I wouldn't call it an inflection point yet until we see that piece of the business changing.

Alejandro Alex Alcala: Yeah. On the question of orders for PFT, the strength has come in some markets that we've been highlighting in the past, that's continued. I think that will continue through the year. Power generation in Americas, pharmaceuticals, cryogenics, and wastewater in particular, gave us the upside. That's been pretty consistent. Interestingly, we don't see those segments impacted by the higher energy prices, so we think demand will remain solid through the year. Chemical has continued to be sluggish at a trough, holding. I wouldn't call it an inflection point yet until we see that piece of the business changing.

Speaker #5: Thanks. Of EPS acquisitions and specifically what you've done to drive near immediate linearity in those businesses, which last conference call we're sort of deemed to be quite second half overall.

Speaker #4: But I wouldn't call it an inflection point yet until we see that piece of the business changing. Now, historically, higher energy prices have led to increased demand in that chemical segment, but it takes a while to read through.

Speaker #3: Yeah. So we obviously did see some accretion in the quarter, as Alex mentioned. We felt just given the results that we feel like we're going to see at least coming into the year.

Speaker #4: And particularly in the Gulf, where we see customers see that benefit of feedstock between gas and oil. And even though demand and customer demand for their customers may be slower, it still makes sense to invest.

Speaker #3: We were number in mind and we felt comfortable today saying that we would see a full year of 15 cents so we did see a portion of that here in the first quarter.

Alejandro Alcala: Historically, higher energy prices has led to increased demand in that chemical segment, but it takes a while to read through, particularly in the Gulf, where customers see that benefit of speed style between gas and oil. Even though end customer demand for their customers may be slower, it still makes sense to invest and expand capacity, debottlenecking, and so forth. I think solid, not quite calling an inflection, especially on the chemical, but definitely better than we expected going into the year and feel better about the prospects that we did 3 months ago.

Alejandro Alex Alcala: Historically, higher energy prices has led to increased demand in that chemical segment, but it takes a while to read through, particularly in the Gulf, where customers see that benefit of speed style between gas and oil. Even though end customer demand for their customers may be slower, it still makes sense to invest and expand capacity, debottlenecking, and so forth. I think solid, not quite calling an inflection, especially on the chemical, but definitely better than we expected going into the year and feel better about the prospects that we did three months ago.

Speaker #4: And expand capacity, de-bottlenecking, and so forth. So, I think, solid—not quite calling it an inflection, especially on the chemical—but definitely better than we expected going into the year, and we feel better about the prospects than we did three months ago.

Speaker #3: I wouldn't say it's necessarily so and how we're feeling about the business. If that helps.

Speaker #3: Great. All right. Thank you very much. Congrats on the good results. Appreciate it.

Speaker #4: Yeah, I think to add, Matt, on the cost actions that we took, we were able to execute faster than we had originally planned. Upside for the year about so two years.

Speaker #4: Thank you.

Speaker #3: Thank you, Ahmed.

Speaker #1: Thank you. We'll take our next question from Matt Somerville of DA Davidson. Please go ahead. Your line is open.

Speaker #5: Thanks. A couple of questions. Community comment on the magnitude of EPS secretion you witnessed? Is it pertaining to the acquisitions and specifically what you've done to drive near immediate linearity in those businesses, which last conference call we're sort of deemed to be quite second half back half loaded overall?

Speaker #4: Now that said, as some of this backlog with improved pricing reads through, we'll still expect to see some gradual improvements from the acquisition of the year progresses.

Amit Mehrotra: Great. All right. Thank you very much. Congrats on those good results. Appreciate it.

Alejandro Alcala: Thank you.

Alejandro Alcala: Thank you, Matt.

Alejandro Alex Alcala: Thank you, Amit.

Speaker #3: Yeah. We saw more a little bit more of volumes have been a bit stronger as well, in particular for in particular for drug.

Operator: Thank you. We'll take our next question from Matt Summerville of D.A. Davidson. Please go ahead, your line is open.

Speaker #5: And then I have a follow-up.

Matt Summerville: Thanks. Couple questions. Can you maybe comment on the magnitude of EPS accretion you witnessed as it pertained to the acquisitions? Specifically, what you've done to drive near immediate linearity in those businesses which, you know, last conference call were sort of deemed to be quite H2 load, you know, H2 loaded overall? I have a follow-up. Rich.

Speaker #4: Right. Yeah. So we obviously did see some accretion in the quarter, as Alex mentioned. We felt just given the results that we feel like we're going to see at least double what we thought on a full year basis.

Speaker #5: Understood. Thank you for that. And maybe Alex, if you can you're seeing in the M&A whether you see more deals getting over the finish line before the end of the year into the early part of '27.

Speaker #4: So coming into the year, we had in our minds about an eight cent number. And we felt comfortable today saying that we would see a full year of fifteen cents, so we did see a portion of that here in the first quarter.

Speaker #5: And if the average deal size you're looking at is starting to kind of similar in nature to.

Richard A. Maue: We obviously did see some accretion in the quarter, as Alex mentioned. We felt, just given the results that we feel like we're gonna see at least double what we thought on a full year basis. Coming into the year, we had in our minds about an $0.08 number in mind. You know, we felt comfortable today saying that we would see a full year of $0.15. We did see a portion of that here in the Q1. You know, you know, perhaps close. That would be the overall impact and how we're feeling about the business, if that helps.

Speaker #4: Perhaps close. So that would be the overall impact and how we're feeling about the business. If that helps.

Speaker #4: Yeah, Matt. So deal activity or M&A opportunities continues to be quite strong. There's a lot happening. We're involved in several processes on both range of sizes.

Speaker #3: Yeah. I think to add, Matt, on the cost actions that we took, we were able to execute faster than we had originally planned. So that creates not only upside for the year, but also more balanced earnings through the year.

Speaker #4: Is around that 500 million dollars of value. And but there's deals that are smaller than that that we're looking at that seem quite interesting as bolt-ons.

Speaker #3: Now that said, as some of this backlog with improved pricing reads through, we'll still expect to see some gradual improvements from the acquisition of the year progresses.

Speaker #4: And there's some deals that also look interesting. So we'll see how the year plays out. But as far as activity and focus, there's quite a bit happening.

Alejandro Alcala: Yeah, I think to add, Matt, on the cost actions that we took, we were able to execute faster than we had originally planned. That creates not only upside for the year, but also more balanced earnings through the year. Now that said, as some of this backlog with improved pricing reads through, we'll still expect to see some gradual improvements from the acquisition as the year progresses.

Alejandro Alex Alcala: Yeah, I think to add, Matt, on the cost actions that we took, we were able to execute faster than we had originally planned. That creates not only upside for the year, but also more balanced earnings through the year. Now that said, as some of this backlog with improved pricing reads through, we'll still expect to see some gradual improvements from the acquisition as the year progresses.

Speaker #5: Yeah. The only other thing I would add is that we saw a little bit more in the way of, I think, as we think about the cadence, the volumes have been a bit stronger as well, in particular for DRUC.

Speaker #4: Do you have anything, Rich?

Speaker #3: No, I think that sums it up. The nature of the transactions too, I would say. From a complexity and bandwidth perspective, everything we're looking at is nothing is going to cause us to hesitate in the way of resource constraints.

Speaker #5: Understood. Alex, Rich, if you can expand just on kind of the actionability you're seeing in the M&A pipeline, maybe handicap a bit, whether you see more deals getting over the finish line, before the end of the year into the early part of '27.

Richard A. Maue: Yeah. The only other thing I would add.

Matt Summerville: Great.

Richard A. Maue: is that we saw more, a little bit more in the way of, I think as we think about the cadence, the volumes have been a bit stronger as well, in particular for Druck.

Richard A. Maue: Is that we saw more, a little bit more in the way of, I think as we think about the cadence, the volumes have been a bit stronger as well, in particular for Druck.

Speaker #5: And if the average deal size you're looking at is starting to kind of melt higher similar in maybe more similar nature to the size of PSI as an example.

Speaker #5: Understood. Thank you, guys.

Speaker #1: Thank you. We'll take our next question. Your line is open.

Matt Summerville: Understood. Alex or Rich, if you can expand just on kind of the actionability you're seeing in the M&A pipeline. You know, maybe handicap a bit whether you see more deals getting over the finish line, you know, before the end of the year into the early part of 2027. If the average deal size you're looking at is starting to kinda melt higher, maybe more similar in nature to, you know, the size of PSI, as an example.

Matt Summerville: Understood. Alex or Richard, if you can expand just on kind of the actionability you're seeing in the M&A pipeline. You know, maybe handicap a bit whether you see more deals getting over the finish line, you know, before the end of the year into the early part of 2027. If the average deal size you're looking at is starting to kinda melt higher, maybe more similar in nature to, you know, the size of PSI, as an example.

Speaker #6: Hey, thanks. Good morning, everyone. Hey, just wanted to come back to the comments about arrow aftermarket and completely understand it could sort of fade as the year progresses.

Speaker #3: Yeah, Matt. So deal activity or M&A opportunities continues to be quite strong. There's a lot happening. We're involved in several processes on both sides of the segment.

Speaker #6: What you're actually doing with your guys? Yeah, it could weak or decline in aftermarket in the way you've guided the year here. And the range has changed, right?

Speaker #3: It's a range of sizes. I think we've commented before that there are sweet spot is around that 500 million dollars of value. But there's deals that are smaller than that that we're looking at that seem quite interesting as bolt-ons.

Speaker #6: But yeah.

Speaker #3: Yeah. So I think maybe so if you remember when we came into the year and we initially issued our guidance for commercial aftermarket, we were, I would say, on the lower end of perhaps what the rest of the industry was projecting, right?

Alejandro Alcala: Yeah, Matt. Deal activity or M&A opportunities continues to be quite strong. There's a lot happening. We're involved in several processes on both sides of the segment. It's a range of sizes. I think we've commented before that our sweet spot is around that $500 million of value. There's deals that are smaller than that we're looking at that seem quite interesting as bolt-ons. There are some deals that are a little bit bigger than that also look interesting. It's a bit opportunistic. We'll remain disciplined. We'll see how the year plays out. As far as activity and focus, there's quite a bit happening. You have anything, Rich?

Alejandro Alex Alcala: Yeah, Matt. Deal activity or M&A opportunities continues to be quite strong. There's a lot happening. We're involved in several processes on both sides of the segment. It's a range of sizes. I think we've commented before that our sweet spot is around that $500 million of value. There's deals that are smaller than that we're looking at that seem quite interesting as bolt-ons. There are some deals that are a little bit bigger than that also look interesting. It's a bit opportunistic. We'll remain disciplined. We'll see how the year plays out. As far as activity and focus, there's quite a bit happening. You have anything, Richard?

Speaker #3: And there's some deals that are a little bit bigger than that that also look interesting. So it's a bit opportunistic. We'll remain disciplined so we'll see how the year plays out.

Speaker #3: But as far as activity and focus, there's quite a bit happening. Do you have anything, Rich?

Speaker #5: No. I think that sums it up. The nature of the transactions too, I would say from a complexity and bandwidth perspective, everything we're looking at is nothing is going to cause us to hesitate in the way of resource constraints.

Speaker #3: Coming in, we did a lot of questions. We did get a lot of questions back on that. And here we are a quarter later and we see the headwinds in the marketplace.

Speaker #3: Potentially, from the Middle East, the conflict and we're basically saying here down number for commercial aftermarket. Now, when you consider what our initial guide was, the move and you guys can all do the math, right?

Speaker #5: Understood. Thank you, guys.

Richard A. Maue: No, I think that sums it up. You know, the nature of the transactions too, I would say, you know, from a, from a complexity and bandwidth perspective, everything we're looking at is, you know, nothing is gonna cause us to hesitate in the way of resource constraints.

Speaker #1: Thank you. We'll take our next question from Jeff Sprague with Vertical Research. Please go ahead. Your line is open.

Speaker #6: Hey, thanks. Good morning, everyone. Hey, just wanted to come back to the comments about Arrow aftermarket, and completely understand it could sort of fade as the year progresses, given what's going on.

Speaker #3: It isn't a big number. And in terms of offset, what we are seeing is a pretty considerable demand increase in our view, potentially in, I would say we are seeing in military, in particular in spares, aftermarket you saw in the quarter, we were up 28%.

Speaker #6: But it's a little unclear what you're actually doing with your guidance. Are you sort of saying yeah, it could be weaker, but we can make it up elsewhere?

Matt Summerville: Understood. Thank you, guys.

Operator: Thank you. We'll take our next question from Jeff Sprague with Vertical Research. Please go ahead, your line is open.

Operator: Thank you. We'll take our next question from Jeffrey T. Sprague with Vertical Research. Please go ahead, your line is open.

Speaker #6: Or have you actually dialed in a decline in aftermarket in the way you've guided the year here? I understand the range has changed, right?

Jeff Sprague: Hey, thanks. Good morning, everyone. Hey, just wanted to come back to the comments about aero aftermarket and completely understand it could sort of fade as the year progresses given what's going on. It's a little unclear what you're actually doing with your guidance. Are you sort of saying, Yeah, it could be weaker, but we can make it up elsewhere? Or have you actually dialed in a decline in aftermarket in the way you've guided the year here?

Jeffrey T. Sprague: Hey, thanks. Good morning, everyone. Hey, just wanted to come back to the comments about aero aftermarket and completely understand it could sort of fade as the year progresses given what's going on. It's a little unclear what you're actually doing with your guidance. Are you sort of saying, Yeah, it could be weaker, but we can make it up elsewhere? Or have you actually dialed in a decline in aftermarket in the way you've guided the year here?

Speaker #3: In the second quarter, the F-16 brake control upgrade program, I think you're aware of. So when you look at when you step back and you just look at the overall complexion of our aftermarket and where we're coming from off the first guidance number, highly confident in this revised down outlook for commercial aftermarket.

Speaker #6: But yeah.

Speaker #5: Yeah, thanks, Jeff. So I think maybe a little perspective to start as well on this. So, if you remember when we came into the year and we initially issued our guidance for commercial aftermarket, we were, I would say, on the lower end of perhaps what the rest of the industry was projecting, right?

Speaker #5: We were saying something like in the mid-single-digit range coming in, and we did get a lot of questions. We did get a lot of questions back on that.

Richard A. Maue: Yeah. Jeff.

Richard A. Maue: Yeah. Jeffrey.

Jeff Sprague: I understand the range hasn't changed, right? Yeah.

Jeffrey T. Sprague: I understand the range hasn't changed, right? Yeah.

Speaker #4: I hope it plays out differently, Jeff, right? Because aftermarket demand has been resilient post-COVID, as you know. The higher energy and assumption than we felt comfortable assuming a more conservative view because we have the offsets already line of sight in our backlog.

Richard A. Maue: Yeah. You know, thanks, Jeff. I think maybe a little perspective to start as well on this. If you remember when we came into the year and we initiated, initially issued our guidance for commercial aftermarket, we were I would say, on the lower end of perhaps what the rest of the industry was projecting, right? We were saying something like in the mid-single digit range coming in. You know, we did get a lot of questions back on that. We see the headwinds in the marketplace potentially from the Middle East, the conflict and so forth. We're basically saying here, you know, we're gonna guide down.

Richard A. Maue: Yeah. You know, thanks, Jeffrey. I think maybe a little perspective to start as well on this. If you remember when we came into the year and we initiated, initially issued our guidance for commercial aftermarket, we were I would say, on the lower end of perhaps what the rest of the industry was projecting, right? We were saying something like in the mid-single digit range coming in. You know, we did get a lot of questions back on that. We see the headwinds in the marketplace potentially from the Middle East, the conflict and so forth. We're basically saying here, you know, we're gonna guide down.

Speaker #5: And we see the headwinds in the marketplace potentially from the Middle East, the conflict, and so forth. And we're basically saying here we're going to guide down.

Speaker #5: So our guidance reflects a down number for commercial aftermarket. Now, when you consider what our initial guide was, the move and you guys can all do the math, right?

Speaker #6: Yeah, no, great. I was just unclear if you had formally dialed it in or you were just saying you were very clear answer there.

Speaker #6: Appreciate it. Back to PSI, to what degree have you seen just maybe the commercial front end of the business change? In other words, very good businesses, right?

Speaker #5: It isn't a big number overall. And then in terms of offset, what we are seeing is a pretty considerable demand increase in our view potentially in particular in spares aftermarket you saw in the quarter we were up 28%.

Richard A. Maue: Our guidance reflects a down number for commercial aftermarket. When you consider what our initial guide was, the move, and you guys can all do the math, right? It isn't a big number overall. In terms of offset, what we are seeing is a pretty considerable demand increase in our view, potentially in particular in spares, aftermarket you saw in the quarter, we were up 28%. We have the incremental benefit that comes in Q2 through the balance of the year in the F-16 brake control upgrade program, I think you're aware of.

Speaker #6: Larger organizations. So what's happening on the customer side? Are you seeing better order intake or inquiries in some of those businesses than you might have otherwise expected?

Speaker #5: We have the incremental benefit that comes in the second quarter through the balance of the year in the F16 brake control upgrade program. I think you're aware of that.

Speaker #6: Or again, is the upside more about the pricing and some of the?

Speaker #5: So when you look at when you step back and you just look at the overall complexion of our aftermarket and where we're coming from off the first guidance number that we put out in January, we feel highly confident that we're going to offset even in this revised down outlook for commercial aftermarket.

Speaker #4: Yeah, Jeff. So what we're seeing right now on the commercial side, there's been significant changes on how we operate which projects we go after, how we go after them.

Speaker #4: So I would say we're projects that are very quickly. And also around just our pricing practices, value pricing, those would be the primary areas where we're starting to see differences.

Speaker #3: Now, if it plays out differently, Jeff, right? Because aftermarket demand has been resilient post-COVID, as you know, and higher energy and travel have been resilient.

Alejandro Alcala: Yeah.

Jeffrey T. Sprague: Yeah.

Richard A. Maue: When you step back and you just look at the overall complexion of our aftermarket and where we're coming from off the first, you know, guidance number that we put out in January, you know, we feel highly confident that we're gonna offset even in this revised down outlook for commercial aftermarket.

Speaker #3: But if it plays better than our assumption, then that's an opportunity for us, an upside. But we felt comfortable assuming a more conservative view because we have the offsets already line of sight in our backlog.

Speaker #4: So we have this long period, as you recall, six months areas we've been able to impact the strategies of longer-term growth, which were never baked into our model.

Speaker #6: Yeah. No, great. I was just unclear if you had formally dialed it in or you were just saying you had contingency to deal with if it happened so Rich very clear answer there.

Alejandro Alcala: Now, if it plays out differently, Jeff, right, because aftermarket demand has been resilient post-COVID, as you know, to higher energy and travel has been resilient. If it plays better than our assumption, that's an opportunity for us, an upside. We felt comfortable assuming a more conservative view because we have the offsets already line of sight in our backlog.

Alejandro Alex Alcala: Now, if it plays out differently, Jeffrey, right, because aftermarket demand has been resilient post-COVID, as you know, to higher energy and travel has been resilient. If it plays better than our assumption, that's an opportunity for us, an upside. We felt comfortable assuming a more conservative view because we have the offsets already line of sight in our backlog.

Speaker #4: And so now we're shifting focus into that and we think there's upside, even though we talked about those initiatives developed.

Speaker #6: I appreciate it. And then on just back to PSI, to what degree have you seen just maybe the commercial front end of the business change?

Speaker #3: And plenty of capacity in your defense businesses for these missile-related ramps and the like, or we should expect some more capacity in the ground to ride this wave?

Speaker #6: In other words, very good businesses, right? But orphaned, so to speak, inside a larger organization. So maybe just a little bit of color on what's happening on the customer side.

Jeff Sprague: Yeah, no, great. was just unclear if you had formally dialed it in or you were just saying you had contingency to deal with if it happens. Rich, very clear answer there, appreciate it. Then on, just back to PSI, to what degree have you seen just maybe the commercial front end of the business change? In other words, you know, very good businesses, right, but orphans, so to speak, inside a larger organization. Maybe just a little bit of color on what's happening on the customer side. Are you seeing, you know, better order intake or inquiries in some of those businesses than you might have otherwise expected?

Jeffrey T. Sprague: Yeah, no, great. was just unclear if you had formally dialed it in or you were just saying you had contingency to deal with if it happens. Rich, very clear answer there, appreciate it. Then on, just back to PSI, to what degree have you seen just maybe the commercial front end of the business change? In other words, you know, very good businesses, right, but orphans, so to speak, inside a larger organization. Maybe just a little bit of color on what's happening on the customer side. Are you seeing, you know, better order intake or inquiries in some of those businesses than you might have otherwise expected?

Speaker #6: Are you seeing better order intake or inquiries in some of those businesses than you might have otherwise expected? Or, again, is the upside more about accounts—obviously—but it's more about the pricing and some of the cost actions that you've already elaborated on?

Speaker #4: Deep dive review with the team a few weeks ago. Well-positioned for that. I think the pacing item in the industry will be more the primes.

Speaker #4: We can significantly outpace the ramp-ups of the manufacturers of the actual missile.

Speaker #3: Yeah, Jeff. So what we're seeing right now on the commercial side there's been significant changes on how we operate which projects we go after, how we go after them.

Speaker #3: Thank you.

Speaker #1: Thanks. Take our next question from Justin Ages with CJS Securities. Please go ahead. Your line is open.

Speaker #3: So I would say we're being more successful in winning the target projects that are more interesting and more profitable for us very quickly. And also around just our pricing practices value pricing those would be the primary areas where we're starting to see differences.

Speaker #4: Hi, Justin.

Speaker #7: Hi, morning all. You mentioned chemicals still want to know how that fits into the projects being pushed out. Is that chemical being pushed out or those have already been pushed out?

Jeff Sprague: Again, is the upside more about, and accounts obviously, but it's more about the, you know, the pricing and some of the cost actions that you already elaborated on.

Jeffrey T. Sprague: Again, is the upside more about, and accounts obviously, but it's more about the, you know, the pricing and some of the cost actions that you already elaborated on.

Alejandro Alcala: Yeah, Jeff. What we're seeing right now on the commercial side, there's been significant changes on how we operate, which projects we go after, how we go after them. I would say we're being more successful in winning the target projects that are more interesting and more profitable for us very quickly. Also around just our pricing practices, value pricing, those would be the primary areas where we're starting to see differences. We have this long period, as you recall, 6 months to really prepare, ramp up.

Alejandro Alex Alcala: Yeah, Jeffrey. What we're seeing right now on the commercial side, there's been significant changes on how we operate, which projects we go after, how we go after them. I would say we're being more successful in winning the target projects that are more interesting and more profitable for us very quickly. Also around just our pricing practices, value pricing, those would be the primary areas where we're starting to see differences. We have this long period, as you recall, 6 months to really prepare, ramp up.

Speaker #3: So we have this long period, as you recall, six months to really prepare ramp up. And those are the areas we've been able to impact shortly.

Speaker #7: So no change in the timeline there.

Speaker #4: Yeah, the push-outs that we commented on were specific to the Middle East. Some of the chemical areas have been shut down temporarily. So some of that activity has pushed out to the right.

Speaker #3: Now, we're starting to work the strategies of longer-term growth, which were never baked into our model. And so now we're shifting focus to that, and we think there's upside even to the numbers that we talked about as those initiatives develop.

Speaker #4: No cancellations. So that's very unique to that region and that conflict. Now, here, as we started Q2, we started than I thought they would.

Speaker #6: And maybe just a quick unrelated one. Plenty of capacity in your defense businesses for these missile-related ramps and the like, or we should expect some more capacity in the ground to ride this wave?

Jeff Sprague: Yeah

Jeffrey T. Sprague: Yeah

Alejandro Alcala: And those are the areas we've been able to impact, shortly. Now, we're starting to work the strategies of longer-term growth, which were never baked into our model. Now we're shifting focus into that and we think there's upside even to the numbers that we talked about as those initiatives develop.

Alejandro Alex Alcala: And those are the areas we've been able to impact, shortly. Now, we're starting to work the strategies of longer-term growth, which were never baked into our model. Now we're shifting focus into that and we think there's upside even to the numbers that we talked about as those initiatives develop.

Speaker #4: So factor in some delays in projects in that region, Middle East, in our guide from a conservative standpoint. If it moves faster than, again, it'll be a positive for us.

Speaker #3: Oh, we have plenty of capacity. Actually, Rich and I just did a deep-dive review with the team a few weeks ago. We're very well positioned for that.

Speaker #4: Again, higher to see some momentum in projects that will take several quarters. We are starting to see a little bit of MRO activity pick up, particularly in the Americas.

Speaker #3: I think the pacing item in the industry will be more the primes. We can significantly outpace the ramp-ups of the manufacturers of the actual missile.

Jeff Sprague: Maybe just a quick unrelated one. Plenty of capacity in your defense businesses for these missile-related ramps and the like, or we should expect, you know, some more capacity in the ground to ride this wave?

Jeffrey T. Sprague: Maybe just a quick unrelated one. Plenty of capacity in your defense businesses for these missile-related ramps and the like, or we should expect, you know, some more capacity in the ground to ride this wave?

Speaker #3: So we're in pretty good shape there.

Speaker #6: Great. Thank you.

Speaker #4: Which usually in the year going into next year, thanks for that, Alex. And then staying in PFT, you mentioned good performance in cryo. Can you just remind us or give us some space and the opportunity there?

Alejandro Alcala: No, we have plenty of capacity. Actually, Rich and I just did a deep dive review with the team a few weeks ago. We're very well-positioned for that. I think the pacing item in the industry will be more the primes. We can significantly outpace the ramp-ups of the manufacturers of the actual missile. We're in pretty good shape there.

Alejandro Alex Alcala: No, we have plenty of capacity. Actually, Richard and I just did a deep dive review with the team a few weeks ago. We're very well-positioned for that. I think the pacing item in the industry will be more the primes. We can significantly outpace the ramp-ups of the manufacturers of the actual missile. We're in pretty good shape there.

Speaker #1: Thank you. We'll take our next question from Justin Ages with CJS Securities. Please go ahead. Your line is open.

Speaker #3: Hi, Justin.

Speaker #7: Hi. Morning, all. You mentioned chemicals still sluggish holding at trough levels and just want to know how that fits into the broader commentary that you gave about seeing some TFT projects being pushed out.

Jeff Sprague: Great. Thank you.

Jeffrey T. Sprague: Great. Thank you.

Speaker #7: Is that chemical being pushed out, or are those have already been pushed out? So no change in the timeline there?

Alejandro Alcala: Sure.

Alejandro Alex Alcala: Sure.

Speaker #4: Yeah, so our cryo business today is about 4 or 5 percent of total PFT. But it's growing at mid-teens. Quite fast is mainly very high growing markets like space launch.

Operator: Thank you. We'll take our next question from Justin Ages with CJS Securities. Please go ahead, your line is open.

Speaker #3: So we commented on we're specific to the Middle East dynamic. And it's really related to the conflict where some of the petrochemical areas or refineries have been shut down temporarily so some of that activity has pushed out to the right.

Alejandro Alcala: Hi, Justin.

Alejandro Alex Alcala: Hi, Justin.

Justin Ages: Hi, morning all. You know, you mentioned chemical still sluggish, holding at trough levels and, you know, just wanna know how that fits into the broader commentary that you gave about seeing some PFT projects being pushed out. Is that chemical being pushed out or those have already been pushed out, so no change in the timeline there?

Speaker #3: No cancellations. So that's very unique to that region and that conflict. Now, here as we started Q2, we started seeing those things starting to move.

Speaker #4: So commercial space launch, as you know, is increasing significantly. So supporting that launch platform, not on the actual rockets or aircraft, but a lot of demand support in general space keeps ramping up.

Speaker #3: A little bit faster than I thought they would. So that said, in our guidance, we did factor in some delays in projects in that region, the Middle East, in our guide from a conservative standpoint.

Alejandro Alcala: We commented on were specific to the Middle East dynamic, and it's really related to the conflict where some of the petrochemical areas or refineries have been shut down temporarily. Some of that activity has pushed out to the right, no cancellations. That's very unique to that region and that conflict. Now, here as we started Q2, we started seeing those things starting to move a little bit faster than I thought they would. That said, in our guidance, we did factor in some delays in projects in that region, the Middle East, in our guide from a conservative standpoint. If it moves faster, then again, it'll be a positive for us. More broadly, you know, in chemical, again, higher oil prices.

Alejandro Alex Alcala: We commented on were specific to the Middle East dynamic, and it's really related to the conflict where some of the petrochemical areas or refineries have been shut down temporarily. Some of that activity has pushed out to the right, no cancellations. That's very unique to that region and that conflict. Now, here as we started Q2, we started seeing those things starting to move a little bit faster than I thought they would. That said, in our guidance, we did factor in some delays in projects in that region, the Middle East, in our guide from a conservative standpoint. If it moves faster, then again, it'll be a positive for us. More broadly, you know, in chemical, again, higher oil prices.

Speaker #4: The investments in infrastructure for testing, pharmaceuticals, and other areas, semiconductors, as well. So very, very fast pace. So this is an area that has been basically went from zero a few years ago to 4 to 5 percent now.

Speaker #3: If it moves faster than, again, it'll be a positive for us. More broadly, in chemical, again, higher oil prices. We expect the Gulf at some point to see some momentum in projects that will take several quarters.

Speaker #3: We are starting to see a little bit of MRO activity pick up, particularly in the Americas, which usually precedes project investments here. In the year going into next year would be our expectation.

Speaker #4: Combination organic and inorganic actions.

Speaker #6: That's great. I appreciate you taking the question. Thank ank you.

Speaker #1: Thank you. Georgia Bank, please go ahead. Your line is open.

Speaker #6: Okay. Thanks for that, Alex. And then staying in TFT, you mentioned good performance in cryo. Can you just remind us or give us some color on the size of that space and the market opportunity there?

Alejandro Alcala: We expect the Gulf at some point to see some momentum and projects that will take several quarters. We are starting to see a little bit of MRO activity pick up, particularly in the Americas, which usually precedes project investments later in the year going into next year would be our expectation.

Alejandro Alex Alcala: We expect the Gulf at some point to see some momentum and projects that will take several quarters. We are starting to see a little bit of MRO activity pick up, particularly in the Americas, which usually precedes project investments later in the year going into next year would be our expectation.

Speaker #7: Hi, good morning. Alex, what are the most PMI-sensitive parts of PFT? And are you seeing any uptick in demand in those PMI-sensitive businesses? Uptake has been power, generation, which is right now driven obviously by the investment in data centers that has not, I think, been PMI-related.

Speaker #3: Yeah. So, our cryo business today is about 4 or 5 percent of total PFT. But it's growing at mid-teens—15, 16, 17 percent. So it's growing quite fast.

Justin Ages: Okay. Thanks for that, Alex. Staying in PFT, you mentioned, good, you know, performance in cryo. Can you just remind us or give us some color on the size of that space and the market opportunity there?

Speaker #7: Pharma, cryo, we did solid just industrial. We didn't call it out, but it was a little bit stronger than we expected going into the year.

Speaker #3: It's mainly American-based. Servicing very high-growing markets, like police, are supporting that launch platform. Not on the actual rockets or aircraft, but on the launch is where we're seeing a lot of demand supporting general aerospace environmental testing.

Alejandro Alcala: Yeah, our cryo business today is about 4% to 5% of total PFT, but it's growing at mid-teens, at 15%, 16%, 17%. It's growing quite fast. It's mainly Americas-based, servicing very high-growing markets like space, supporting that launch platform, not on the actual rockets or aircraft, but on the launch is where we're seeing a lot of demand, supporting general aerospace environmental testing. As aerospace keeps ramping up the investments in infrastructure for testing, other areas, semiconductors as well. Very interesting markets, high growth and growing at a fast pace. This is an area that has been part of our transformation. We basically went from 0 a few years ago, to 4% to 5% now. Combination organic and inorganic actions.

Alejandro Alex Alcala: Yeah, our cryo business today is about 4% to 5% of total PFT, but it's growing at mid-teens, at 15%, 16%, 17%. It's growing quite fast. It's mainly Americas-based, servicing very high-growing markets like space, supporting that launch platform, not on the actual rockets or aircraft, but on the launch is where we're seeing a lot of demand, supporting general aerospace environmental testing. As aerospace keeps ramping up the investments in infrastructure for testing, other areas, semiconductors as well. Very interesting markets, high growth and growing at a fast pace. This is an area that has been part of our transformation. We basically went from 0 a few years ago, to 4% to 5% now. Combination organic and inorganic actions.

Speaker #4: Yeah, I would have said general industrial portion as well of the market where we

Speaker #3: So, as aerospace keeps ramping up, the investments in infrastructure for testing, pharmaceuticals, other areas, semiconductors as well. So, very, very interesting markets—high growth and growing at a fast pace.

Speaker #6: I think you all have described PFT as being pretty early cycle. So if the broader industrial cycle is turning as the PMI data suggests, I guess, why would it just be a small benefit to your general industrial business?

Speaker #4: Well, I mean, it was all there, right? So in the industrial spaces, that's a pretty healthy activity. We'll see how things progress. But it was pretty pleased with how it started to could it be become material if it grows 200%?

Speaker #3: So this is an area that has been part of our transformation. We basically went from zero a few years ago to 4 to 5 percent now.

Speaker #3: A combination of organic and inorganic actions.

Speaker #6: That's great. I appreciate you taking the question. Thank you.

Speaker #3: Thanks.

Speaker #1: Thank you. We'll go next to Scott Deshely with Deutsche Bank.

Speaker #8: Hi, good morning. Alex, what are the most PMI-sensitive parts seeing any uptick in demand in those PMI-sensitive businesses, or is it more just areas like pharma and cryo?

Speaker #4: I mean, we look at which is the number of range of microwave and modular power product lines. And so I would use that 30 or 40 million jump off 2x to now to 2030.

Speaker #3: I mean. Our biggest uptick has been power. Generation, which is right now driven obviously by the investment in data centers that has not, I think, been PMI-related.

Justin Ages: That's great. I appreciate you taking the question. Thank you.

Alejandro Alcala: Thanks.

Alejandro Alex Alcala: Thanks.

Operator: Thank you. We'll go next to Scott Deuschle with Deutsche Bank.

Scott Deuschle: Hi, good morning. Alejandro Alcala, what are the most PMI sensitive parts, seeing any uptick in demand in those PMI sensitive businesses or is it more just areas like pharma and cryo?

Scott Deuschle: Hi, good morning. Alejandro(Alex) Alcala, what are the most PMI sensitive parts, seeing any uptick in demand in those PMI sensitive businesses or is it more just areas like pharma and cryo?

Speaker #3: Pharma, cryo, wastewater. We did see pretty solid just industrial activity in the quarter. We didn't call it out, but it was a little bit stronger than we expected going into the year.

Alejandro Alcala: I mean, our biggest uptick has been, you know, power generation, which is right now driven obviously by the investment in data centers that have not, I think been, PMI related pharma, cryo, and wastewater. We did see pretty solid just industrial-.

Alejandro Alex Alcala: I mean, our biggest uptick has been, you know, power generation, which is right now driven obviously by the investment in data centers that have not, I think been, PMI related pharma, cryo, and wastewater. We did see pretty solid just industrial-.

Speaker #6: Okay. And then last question. Oh, go ahead.

Speaker #4: Yeah, pack three would be towards the top end of the programs. Maybe 12 or so programs that were the ones that are at the top, Scott.

Speaker #5: Yeah. I would have said general industrial portion as well of the market where we are seeing a little bit of improvement, Scott. That helps.

Speaker #8: Okay. I think you all have described PFT as being pretty early cycle. So if the broader industrial cycle is turning as the PMI data suggests, I guess, why would it just be a small benefit to your general industrial business?

Speaker #6: Okay, thank you. Then Alex, can you give us a sense as to how much of PFT's cryo sales are related to the space market?

Scott Deuschle: Yeah

Alejandro Alcala: activity in the quarter. We didn't call it out, but it was a little bit stronger than we expected going into the year.

Alejandro Alex Alcala: activity in the quarter. We didn't call it out, but it was a little bit stronger than we expected going into the year.

Speaker #6: And will that space SpaceX's launch cadence?

Richard A. Maue: Yeah. I would, I would've said general industrial portion as well of the market where, you know, we are seeing a little bit of improvement, Scott, if that helps.

Speaker #3: Well, I mean, it was low it was mid-single-digit type activity that we saw there, right? So in the industrial spaces, that's a pretty healthy activity.

Speaker #4: Yeah, on the space launch, it's about 35%. So you put in aerospace in general, and now you're looking more like 45%. Like I said, falling so far.

Scott Deuschle: Okay. I think you all have described PFT as being pretty early cycle. If the broader industrial cycle is turning as the PMI data suggests, I guess why would it just be a small benefit to your general industrial business?

Speaker #3: We’ll see how things progress. But I was pretty pleased with how it started the year.

Speaker #8: Okay. And then, Alex, how large is the PAC-3 product line for Crane today? And if it's not material now, I guess, could it become material if it grows 200%?

Speaker #4: With the launch activity, which is increasing, but not only SpaceX, but the other companies like Blue Origin and so forth. So we service I think there's that space launch.

Alejandro Alcala: Well, I mean, it was low, it was mid-single digit type activity that we saw there, right? In the industrial spaces, that's a pretty healthy activity. We'll see how things progress, but we're pretty pleased with how it started the year.

Alejandro Alex Alcala: Well, I mean, it was low, it was mid-single digit type activity that we saw there, right? In the industrial spaces, that's a pretty healthy activity. We'll see how things progress, but we're pretty pleased with how it started the year.

Speaker #3: I mean, we look at the whole missile platform, right? Which is a number I have in my head. It's around that 30 to 40 million range of microwave and modular power product lines.

Speaker #4: With the space launch activity.

Speaker #6: Thank you.

Scott Deuschle: Okay. Then Alejandro, how large is the PAC-3 product line for Crane today? If it's not material now, I guess could it become material if it grows 200%?

Speaker #1: Thank you. We'll take our next question from Miles Walton with Wolf Research. Please go ahead. Your line is open.

Speaker #3: And so I would use that 30 or 40 million jump-off point. And the projections are from 2X to 4 or 5X growth from now to 2030.

Speaker #6: I was wondering if you are reducing the outlook there because of what you're seeing, or because of what you anticipate seeing? And if you can give us any clarity or color as it relates to recent bookings trends that the 11% quarter wouldn't suggest much, but color again, you're doing this based on what you're seeing or what you anticipate you'll see.

Alejandro Alcala: I mean, we look at the whole missile platform, right? Which is a number I have in my head. It's around that $30 to 40 million range of microwave and modular power.

Alejandro Alex Alcala: I mean, we look at the whole missile platform, right? Which is a number I have in my head. It's around that $30 to 40 million range of microwave and modular power.

Speaker #8: Okay. And then last question, oh, go ahead.

Speaker #5: Yeah, PAC-3 would be towards the top end of the programs. We have maybe 12 or so programs that we're watching closely, and that would be one of the ones that are at the top, Scott.

Richard A. Maue: Modular power.

Alejandro Alcala: product lines. I would, I would use that $30 to 40 million as a jump off point, and the projections are from 2x to 4x or 5x growth from now to 2020, 2030.

Alejandro Alex Alcala: product lines. I would, I would use that $30 to 40 million as a jump off point, and the projections are from 2x to 4x or 5x growth from now to 2020, 2030.

Speaker #4: Yeah, I'll comment first and then Rich can add. But I mean, if you look historically, right over the last 15 years, pre-COVID and post-COVID are two different stories.

Speaker #8: Okay. Thank you. And then, Alex, can you give us a sense as to how much of PFT's cryo sales are related to the space market?

Scott Deuschle: Okay.

Richard A. Maue: Yeah.

Scott Deuschle: Last question?

Speaker #8: And will that space growth within cryo, is that going to correlate with SpaceX's launch cadence over the coming years?

Richard A. Maue: I would say-.

Scott Deuschle: Oh, go ahead.

Richard A. Maue: PAC-3 would be towards the top end of the programs. You know, we have maybe 12 or so programs that we're watching closely and that would be one of the ones that are at the top, Scott.

Speaker #4: Pre-COVID, it was strong correlation. Higher energy prices, higher airfare, lower activity demand. Post-COVID, we saw a big spike in energy prices in the 2022 and very resilient.

Speaker #3: Yeah, on the space launch, it's about 35%. And then you put in aerospace in general, and now you're looking more like 45%. And the balance is other industrials, like I said, pharma and so forth.

Scott Deuschle: Okay. Thank you. Alex, can you give us a sense as to how much of PFT's cryo sales are related to the space market? Will that space growth within cryo, is that going to correlate with SpaceX's launch cadence over the coming years?

Speaker #4: There was no from there. going to happen. We have not seen any decline, as Rich mentioned, 11% up, and we're also sequentially up. The industry through a range of scenarios that would give us a lot of confidence in our guide.

Speaker #3: But the growth does correlate with the launch activity, which is increasing—not only SpaceX, but the other companies like Blue Origin and so forth.

Alejandro Alcala: Yeah. On the space launch it's about 35%. you put in aerospace in general, now you're looking more like 45%, and the balance is other industrials, like I said, pharma and so forth. the growth does correlate with the launch activity, which is increasing. not only SpaceX, but the other companies like Blue Origin and so forth. we service, I think there's 6 or 7 key customers of ours in that space launch, and it's growing exponentially in line with the space launch activity.

Alejandro Alex Alcala: Yeah. On the space launch it's about 35%. you put in aerospace in general, now you're looking more like 45%, and the balance is other industrials, like I said, pharma and so forth. the growth does correlate with the launch activity, which is increasing. not only SpaceX, but the other companies like Blue Origin and so forth. we service, I think there's 6 or 7 key customers of ours in that space launch, and it's growing exponentially in line with the space launch activity.

Speaker #3: So, we service, I think, there's six or seven key customers of ours in that space launch, and it's growing exponentially, in line with the space launch activity.

Speaker #4: So based on that, we assume the decline in our guide to have really, really high confidence. But it could change, and that would just be upside for us.

Speaker #8: Thank you.

Speaker #1: Thank you. We'll take our next question from Miles Walton with Wolf Research. Please go ahead. Your line is open.

Speaker #6: Thanks, good morning. I was wondering if on the commercial aftermarket, you comment that whether or not you are reducing the outlook there because of what you're seeing, or because of what you anticipate seeing, and if you can give us any clarity or color as it relates to recent bookings trends that the 11% growth in orders versus the 13% declines.

Speaker #6: Okay. And relative to the decline, you're thinking like mid-single-digit positive was before, and now you're sort of conceptually thinking that's going to decline is what you're baking in from a conservative viewpoint.

Speaker #4: Yeah, okay.

Scott Deuschle: Thank you.

Speaker #6: All right. Core growth, as you look to the rest of the year, given the strong orders in the first quarter, are you able to see the turning to get to low single-digit positive organic growth or core growth for PFT in the second quarter?

Operator: Thank you. We will take our next question from Myles Walton with Wolfe Research. Please go ahead, your line is open.

Speaker #6: In the quarter, I wouldn't suggest you're seeing much, but maybe just add color if, again, you're doing this based on what you're seeing or what you anticipate you'll see.

Myles Walton: Thanks. Good morning. I was wondering if on the commercial aftermarket, you comment that whether or not you are reducing the outlook there because of what you're seeing or because of what you anticipate seeing, and if you can give us any clarity or color as it relates to recent bookings trends. The, you know, 11% growth in orders versus the 13% declines in the quarter wouldn't suggest you're seeing much. Maybe just add color if, again, you're doing this based on what you're seeing or what you anticipate you'll see.

Speaker #3: Yeah, I'll comment first, and then Rich can add. But, I mean, if you look historically, right, over the last 15 years, high energy prices pre-COVID and post-COVID are two different stories.

Speaker #4: We're expecting flat to low single-digit yeah, I would think we're second quarter maybe a little bit consistent with Q1, right?

Speaker #3: Pre-COVID, it was a pretty strong correlation. Higher energy prices, higher airfare, lower activity demand. Post-COVID, we saw a big spike in energy prices in the 2022 with the Ukraine conflict.

Speaker #6: I would think, yeah, I would think if you're looking at just sequentially, not different from Q1, without having the FX and in front of me and put that, that's the way we're thinking about the overall absolute number.

Alejandro Alcala: Yeah. I'll comment first and then Rich can add. I mean, if you look historically, right, over the last 15 years, high energy prices pre-COVID and post-COVID are two different stories. Pre-COVID, it was a pretty strong correlation. Higher energy prices, higher airfare, lower activity demand. Post-COVID, we saw a big spike in energy prices in 2022 with the Ukraine conflict, and it was very resilient. There was no slowdown from there. We're not sure what is going to happen. We have not seen any decline. As Rich mentioned, 11% up, and we're also sequentially up. However, as we look forward and considering the industry general concerns, we wanted to think through a range of scenarios that would give us a lot of confidence in our guide.

Alejandro Alex Alcala: Yeah. I'll comment first and then Richard can add. I mean, if you look historically, right, over the last 15 years, high energy prices pre-COVID and post-COVID are two different stories. Pre-COVID, it was a pretty strong correlation. Higher energy prices, higher airfare, lower activity demand. Post-COVID, we saw a big spike in energy prices in 2022 with the Ukraine conflict, and it was very resilient. There was no slowdown from there. We're not sure what is going to happen. We have not seen any decline. As Rich mentioned, 11% up, and we're also sequentially up. However, as we look forward and considering the industry general concerns, we wanted to think through a range of scenarios that would give us a lot of confidence in our guide.

Speaker #3: And it was very resilient. There was no slowdown from there. So we're not sure. What is going to happen? We have not seen any decline, as Rich mentioned, 11% up, and we're also sequentially up.

Speaker #6: Okay. And then just one last one. What is the 2022 you did in the first quarter?

Speaker #4: So we mentioned on the call the increased we're definitely going to be seeing in our starting to see the inflation on commodities as well as freight.

Speaker #3: However, as we look forward and considering the industry general concerns, we wanted to think through a range of scenarios that would give us a lot of confidence in our guide.

Speaker #4: You have what you're getting through, but just perspective, we see the opportunity to get more price to offset as we move through the balance of the year and we get through that backlog.

Speaker #3: So based on that, we assume the decline in our guide to have—it could maintain, it could sustain. And that would just be upside for us.

Speaker #3: Do you add, Rich?

Speaker #4: So that pressure is, I would say it's modest, but suggesting an increase for the full year improved margins versus yeah, we're saying about a half, I think a half a point improved overall margin profile.

Speaker #5: No. I think that sums it up, Miles.

Speaker #8: Okay. And relative to the decline, you're thinking like mid-single-digit positive was before, and now you're sort of conceptually thinking mid-single-digit decline is what you're baking in from a conservative viewpoint.

Alejandro Alcala: based on that. We assume the decline in our guide to have, it could maintain, it could sustain, and that would just be upside for us. You add it, Richard?

Speaker #8: Is that right?

Alejandro Alex Alcala: Based on that. We assume the decline in our guide to have, it could maintain, it could sustain, and that would just be upside for us. You add it, Richard?

Speaker #5: Yeah. I think that's fair.

Speaker #8: Okay. All right. Great. And then on PFT, just as it relates to core growth, as you look to the rest of the year given the strong orders in the first quarter, are you able to see the turning to get to low single-digit positive organic growth or core growth for PFT in the second quarter?

Speaker #6: Yeah, sorry, I was just comparing the first quarter versus the implied next. Down versus the first quarter on.

Richard A. Maue: No, I think that sums it up, Myles.

Myles Walton: Okay. Relative to the decline, you're thinking like mid-single digit positive was before, now you're sort of conceptually thinking mid-single digit decline is what you're baking in from a conservative viewpoint. Is that right?

Speaker #4: Yeah, well, I think again, it gets to it does get to some of that. It's basically the same answer, right? I'm going to see some inflationary pressure.

Speaker #3: For the year, we're still expecting flat to low single digits. I think for the quarters, yeah, I would think we're—second quarter maybe a little bit consistent with Q1, right?

Speaker #4: I'm going to cover some of it net, albeit up 50. But yeah, all right.

Richard A. Maue: Yeah, I think that's fair.

Myles Walton: Okay. All right, great. On PFT, just, as it relates to core growth as you look to the rest of the year, given the strong orders in Q1, are you able to see the turning to get to low single-digit positive organic growth or core growth for PFT in Q2?

Speaker #5: I would think, yeah. I would think if you're looking at just sequentially, think of it as not that different from Q1 into Q2 sequentially, Miles—without having the FX in front of me—but that's the way we're thinking about the overall absolute number.

Speaker #6: Thank you.

Speaker #4: Yep.

Speaker #1: Thank you. We'll take our next question from Nathan Jones with Steeple. Please go ahead. Your line is open.

Alejandro Alcala: I think for the year, you know, we're still expecting flat to low single digits. I think for the quarters.

Alejandro Alex Alcala: I think for the year, you know, we're still expecting flat to low single digits. I think for the quarters.

Speaker #7: Good morning, everyone. Acquisitions moving to the strategy deployment phase on the acquisitions. I think you talked a little bit about shifting the focus to growth initiatives.

Richard A. Maue: Yeah.

Speaker #8: Okay, and then just one last one. What is the downward pressure on margins for the rest of the year versus the '23-'22 you did in the first quarter?

Alejandro Alcala: I would think we're Q2 may be a little bit consistent with Q1, right?

Alejandro Alex Alcala: I would think we're Q2 may be a little bit consistent with Q1, right?

Richard A. Maue: I would think, Yeah, I would think if you're looking at just sequentially, think of it as a, you know, not that different from Q1 into Q2 sequentially, Myles, without having the FX in front of me. That's the way we're thinking about the overall absolute number.

Speaker #7: I'm hoping you could maybe provide a little bit more color on what that involves?

Speaker #5: The downward pressure? So we mentioned on the call the increased we're definitely going to be seeing in our starting to see the inflation on commodities as well as freight.

Speaker #4: Yeah, so when you think about, again, to be clear, Nathan, none of this was baked into our model; it's all upside. But if you think about drugs, some of the opportunities we saw were military defense position in Europe and in the United States defense, where our legacy aerospace and defense business has strength.

Speaker #5: Earlier in the year, you have a backlog that you're getting through. So, just from a timing perspective, we see the opportunity to get more price to offset as we move through the balance of the year.

Myles Walton: Okay. Just one last one. What is the pre- downward pressure on margins for the rest of the year versus the 23.2% you did in Q1?

Speaker #5: And we get through that backlog. So that pressure is, I would say, it's modest, but something that we're working through and comfortable with overall and suggesting an increase net to the margins.

Richard A. Maue: The downward pressure? You know, we mentioned on the call, we're definitely going to be seeing and are starting to see the inflation on commodities as well as freight. You know, earlier in the year you have a backlog that you're getting through, but just from a timing perspective, we see the opportunity to get more price to offset as we move through the balance of the year and we get through that backlog. That pressure, you know, is, I would say it's modest, but something that we're working through and comfortable with overall and suggesting an increase net to the margins.

Speaker #4: So we're building up the strategies of how to create those synergies and create growth. There's very different administration share also in Europe, US. Differences channel on channel that we are working through.

Speaker #3: So for the full year, improved margins versus what?

Speaker #5: Yeah. We're saying about a half of I think a half a point improved overall margin profile.

Speaker #6: Yeah. Sorry. I was just comparing the first quarter versus the implied next three quarters is the next three quarters are obviously slightly down versus the first quarter on the '23%.

Speaker #4: So those are a couple of examples of where there's potential growth upside. Panametrics also regional. In America, to grow, they have lower share in Americas than average.

Speaker #5: Yeah. Well, I think, again, it gets to it does get to some of that it's basically the same answer, right? I'm going to see some inflationary pressure.

Alejandro Alcala: For the full year, improved margins versus-

Alejandro Alex Alcala: For the full year, improved margins versus-

Speaker #5: I'm going to cover some of it. Net, albeit, up 50 basis the 50 basis points. But yeah, it's going to be that inflationary pressure, Miles.

Richard A. Maue: About a half, yeah, we're saying about a half a, I think a half a point improved overall margin profile.

Myles Walton: Yeah, sorry, I was just comparing Q1 versus the implied next 3 quarters is, you know, the next 3 quarters are obviously slightly down versus Q1 on the 23%.

Speaker #4: So there's opportunity there in aligning those efforts from a power generation piece of nuclear, but we also have some product lines around other platforms of radiation monitoring and homeland security.

Speaker #6: Got it. All right. Thank you.

Speaker #5: Yep.

Speaker #1: Thank you. We'll take our next question from Nathan Jones with Steeple. Please go ahead, your line is open.

Richard A. Maue: Yeah. Well, I think again, it gets to, it does get to some of that. It's basically the same answer, right? I'm gonna see some inflationary pressure. I'm gonna cover some of it, net I'll be up 50 basis points. Yeah, it's gonna be that inflationary pressure, Myles.

Speaker #9: Good morning, everyone.

Speaker #10: Good morning, Nathan.

Speaker #9: I'll do a couple on the acquisitions. Alex, you talked about moving to the strategy deployment phase on the acquisitions. And I think you talked a little bit about shifting the focus to growth initiatives.

Speaker #4: So we plan to. So those are some of the things we're thinking about.

Myles Walton: Got it. All right. Thank you.

Speaker #6: Great. Thanks. My second question was going to be on the value-based pricing that you're already beginning to realize. I think that's very rapid benefit there.

Richard A. Maue: Yep.

Speaker #9: I'm hoping you could maybe provide a little bit more color on what that involves for each business.

Operator: Thank you. We'll take our next question from Nathan Jones with Stifel. Please go ahead, your line is open.

Nathan Jones: Good morning, everyone.

Speaker #3: Yeah. So when you think about, again, just to be clear, Nathan, none of this was baked into our model at all upside. But if you think about some of the opportunities we saw were military, defense, drug has a pretty good position in Europe.

Speaker #6: I know some longer-term contracts. So maybe where you'll see it in the future. I mean, it's obviously very early in the piece. So if I just any color you could give us around that stuff.

Richard A. Maue: Morning, hey, Nathan.

Nathan Jones: I'll do a couple on the acquisitions. Alex, you talked about moving to the strategy deployment phase on the acquisitions, and I think you talked a little bit about shifting the focus to growth initiatives. I'm hoping you could maybe provide a little bit more color on what that involves for each business.

Speaker #4: Yeah, so the longer-term contract, Nathan, are probably less than you would think. About 30% of the business. So it's a lot of areas where we can move more quickly on the writer's strokes part of the business.

Speaker #3: And not really any position of note in the United States defense, where our legacy aerospace and defense business has strength. So, we're building up the strategies of how to create those synergies.

Alejandro Alcala: Again, just to be clear, Nathan, none of this was baked into our model. It's all upside. If you think about Druck, some of the opportunities we saw were, you know, military defense, Druck has a pretty good position in Europe and not really any position of note in United States defense, where our legacy aerospace and defense business has strength. We're building up the strategies of how to create those synergies and create growth. There's various regional differences in penetration and share, also in Druck, in the business, Europe, US differences, channel, non-channel, that we are working through. Those are a couple examples of where there's potential growth upside. Panametrics, in that business, we think about really also regional.

Alejandro Alex Alcala: Again, just to be clear, Nathan, none of this was baked into our model. It's all upside. If you think about Druck, some of the opportunities we saw were, you know, military defense, Druck has a pretty good position in Europe and not really any position of note in United States defense, where our legacy aerospace and defense business has strength. We're building up the strategies of how to create those synergies and create growth. There's various regional differences in penetration and share, also in Druck, in the business, Europe, US differences, channel, non-channel, that we are working through. Those are a couple examples of where there's potential growth upside. Panametrics, in that business, we think about really also regional.

Speaker #3: And create growth. There are various regional differences and penetration in share also in drug in the business. Europe, US, differences on channel that we are working through.

Speaker #4: It's about 40%. And the Panametrics is very, very low. So all in all, there's a lot of opportunities within the year. And then as we continue to work the longer-term contract, so very confident in our ability to keep next year.

Speaker #3: So those are a couple of examples of where there's potential growth upside. Panametrics, in that business, we think about really also regional. I think we see a lot more opportunity in the Americas.

Speaker #3: To grow, they have lower share in Americas than average, so there's opportunity there in aligning those efforts from a commercial standpoint. And then, Rhoda Stokes, we have a very, very strong position on the power generation piece of nuclear.

Speaker #1: Thank you once again. If you do have a question, you may press star one on your telephone keypad at this time. We'll take our next question from Ronald Epstein with Bank of America.

Speaker #1: Please go ahead. Your line is open.

Speaker #4: Thanks for hearing you guys. On the balance of the year for commercial air, if we're going to see aftermarket decline in the guide, how should we be thinking about margins for the segment and for PFC concerns on the new tariffs?

Speaker #3: But we also have some product lines around other platforms of radiation monitoring and homeland security. So we plan to build on those platforms as well and grow.

Alejandro Alcala: I think we see a lot more opportunity in Americas to grow. They have a lower share in Americas than average. There's opportunity there in aligning those efforts from a commercial standpoint. You know, Reuter-Stokes, we've been, we have a very strong position on power generation piece of nuclear, but we also have some product lines around other platforms of radiation monitoring and homeland security. We plan to build on those platforms as well and grow. Those are some of the things we're thinking about from a strategy deployment standpoint.

Alejandro Alex Alcala: I think we see a lot more opportunity in Americas to grow. They have a lower share in Americas than average. There's opportunity there in aligning those efforts from a commercial standpoint. You know, Reuter-Stokes, we've been, we have a very strong position on power generation piece of nuclear, but we also have some product lines around other platforms of radiation monitoring and homeland security. We plan to build on those platforms as well and grow. Those are some of the things we're thinking about from a strategy deployment standpoint.

Speaker #3: So those are some of the things we're thinking about from a strategy deployment standpoint.

Speaker #10: That's great. Thanks, Mark. Second question was going to be on the value-based pricing that you're already beginning to realize. I think that's a very rapid benefit there.

Speaker #6: Yeah, so on a good question. So on the margins overall, Jordan, when you look at that mixed differential, what I would say, I step back and say, first of all, our portfolio in aerospace and advanced technologies commercial OE, right?

Speaker #10: I know some of these businesses have longer-term contracts, so maybe you can talk a little bit about where you’re seeing value-based pricing, and where you’ll see it in the future.

Speaker #6: It's our model, as you know, is very or perhaps different from others in the industry. So when we do mix up and down, yes, there is some impact, but it's not as perhaps drastic as other companies.

Speaker #10: I mean, it's obviously very early in the piece so far. Just any color you could give us around that stuff.

Nathan Jones: Great. Thanks. My second question was going to be on the value-based pricing that you're already beginning to realize. I think that's, you know, very rapid benefit there. I know some of these businesses have longer term contracts, so maybe you can talk a little bit about where you're seeing value-based pricing, where you'll see it in the future, and I mean, it's obviously it's very early in the piece so far, just any color you could give us around that stuff.

Speaker #3: Yeah. So the longer-term contract, Nathan, are probably less than you would think. If you think about drug, about 30% of the business is on longer-term contracts.

Speaker #6: Specific to the commercial aftermarket, in our guidance, when we look at what we're seeing in military, moving in the opposite direction, the margin profiles are not that far off, frankly.

Speaker #3: So there's a lot of areas where we can move more quickly on the Rhoda Stokes part of the business. It's about 40%. Some of these are naturally coming up and renegotiated.

Speaker #6: They're quite similar. So is not going to be as significant at all. In PFT, with respect to tariffs, I would say the overall tariff change has not been all that material to us.

Alejandro Alcala: Yeah. The longer term contracts, Nathan, are probably less than you would think. If you think about Druck, about 30% of the business is on longer term contracts. There's a lot of areas where we can move more quickly. On the Reuter-Stokes part of the business, it's about 40%. Some of these are naturally coming up and renegotiated. The Panametrics is very, very low on longer term contracts. All in all, there's a lot of opportunities within the year, as we continue to work the longer term contracts. Very confident in our ability to keep improving these margins through the year and going into next year. Thanks very much for taking the questions.

Alejandro Alex Alcala: Yeah. The longer term contracts, Nathan, are probably less than you would think. If you think about Druck, about 30% of the business is on longer term contracts. There's a lot of areas where we can move more quickly. On the Reuter-Stokes part of the business, it's about 40%. Some of these are naturally coming up and renegotiated. The Panametrics is very, very low on longer term contracts. All in all, there's a lot of opportunities within the year, as we continue to work the longer term contracts. Very confident in our ability to keep improving these margins through the year and going into next year.

Speaker #3: And the Panametrics is very, very low on longer-term contracts. So all in all, there's a lot of opportunities within the year. And then as we continue to work the longer-term contracts.

Speaker #3: We're very confident in our ability to keep improving these margins through the year and going into next year.

Speaker #6: So far in the year, it won't be the one area that I want to do is with the refund process to the extent that we're successful there.

Speaker #10: Thanks very much for taking the questions.

Speaker #1: Thank you. Once again, if you do have a question, you may press star one on your telephone keypad at this time. We'll take our next question from Ronald Epstein with Bank of America.

Speaker #6: We'll, of course, call that out in balance a year, but none of that is factored into our guidance. No upside is factored into our guidance.

Speaker #1: Please go ahead. Your line is open.

Speaker #11: Hey, good morning. This is Jordan Lanez on Ferran. Thanks for taking the question.

Speaker #10: Hi, Jordan.

Speaker #1: Thank you. This includes a Q&A portion of today's call. I'd like to now turn the floor back over to Alex Alcala for closing remarks.

Speaker #11: I can see I hear you guys. On the balance of the year for commercial aero if we're going to see aftermarket decline in the guide how should we be thinking about margins for the segment and for PFT?

Nathan Jones: Thanks very much for taking the questions.

Operator: Thank you. Once again, if you do have a question, you may press star one on your telephone keypad at this time. We will take our next question from Ronald Epstein with Bank of America. Please go ahead, your line is open.

Speaker #4: Thank you all for joining us today. Over the past 13 years, transformation significantly improving margins and growth and delivering strong shareholder value on their max's leadership.

Jordan Lanay: Hey, good morning. This is Jordan Lanay on for Ron. Thanks for taking the question.

Jordan Lanay: Hey, good morning. This is Jordan Lanay on for Ronald. Thanks for taking the question.

Alejandro Alcala: Hi, Jordan.

Alejandro Alex Alcala: Hi, Jordan.

Speaker #4: That foundation positions us exceptionally well for what comes next. It's the next phase of the same journey. It's about acceleration of profitable growth. Looking ahead, I am more excited than ever about Crane's future and the opportunity to continue delivering for our customers, our associates, our community, and our shareholders.

Jordan Lanay: Good to see, hear you guys. On the balance of the year, for commercial aero, if we're going to see aftermarket decline in the guide, how should we be thinking about margins for the segment? For PFT, are you guys factoring in or have any concerns on the new tariffs that are going through on raw materials?

Speaker #4: We will remain focused to address strong organic growth while continuing to pursue our discipline approach to accelerating inorganic growth. I've had the privilege of working alongside an extraordinary team across head.

Speaker #4: With this team, I'm confident that the best chapters of Crane are still in front of us. Thank you all for your time and attention this morning.

Speaker #4: Have a great day.

Q1 2026 Crane Co Earnings Call

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