Q2 2026 Crane Co Earnings Call

July 29, 2026

Speaker #1: Please stand by. Your meeting is about to begin. Welcome to the Crane Company's second 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 your questions following the presentation.

Operator: Please stand by. Your meeting is about to begin. Welcome to the Crane Company Second 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 your questions following the presentation. If you would like to ask a question at that time, please press star one on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star two. Others can hear your questions clearly, we ask that you pick up your handset for best sound quality. Lastly, if you should need operator assistance, please press star zero. I would now like to turn the call over to Allison Poliniak, Vice President of Investor Relations.

Operator: Welcome to the Crane Company Q2 2026 Earnings Conference Call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star one on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star two. Others can hear your questions clearly, we ask that you pick up your handset for best sound quality. Lastly, if you should need operator assistance, please press star zero. I would now like to turn the call over to Allison Poliniak, Vice President of Investor Relations.

Speaker #1: If you would 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.

Speaker #1: So others can hear your questions clearly, we ask that you pick up your handset for best sound quality. Lastly, if you should need operator assistance, please press star 0.

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

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

Allison Poliniak-Cusic: Thank you, Tasha, and good day, everyone. Welcome to our Q2 2026 earnings release conference call. I'm Allison Poliniak-Cusic, Vice President of Investor Relations. 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, Treasury and 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 will respond to your questions. Just a reminder, the comments that we make on this call will include some forward-looking statements. We refer you to the cautionary language at the bottom of our earnings release and also in our annual report, 10-K, and subsequent filings pertaining to forward-looking statements.

Allison Poliniak-Cusic: Thank you, Tasha, and good day, everyone. Welcome to our Q2 2026 earnings release conference call. I'm Allison Poliniak-Cusic, Vice President of Investor Relations. On our call this morning, we have Alex Alcala, President and Chief Executive Officer, and Richard Maue, our Executive Vice President and Chief Financial Officer, along with Jason Feldman, Senior Vice President, Treasury and 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 will respond to your questions. Just a reminder, the comments that we make on this call will include some forward-looking statements. We refer you to the cautionary language at the bottom of our earnings release and also in our annual report, 10-K, and subsequent filings pertaining to forward-looking statements.

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.

Speaker #2: Along with Jason Feldman, Senior Vice President, Treasury and 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 will respond to your questions.

Speaker #2: And just a reminder, the comments that we make on this call will include some forward-looking statements. We refer you to the cautionary language at the bottom of our earnings release and also in our annual filings pertaining to forward-looking statements.

Speaker #2: Also, during the call, we will be using some non-gap numbers, which are reconciled to the comparable gap numbers in tables at the end of our press release and a company slide presentation.

Allison Poliniak-Cusic: 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 accompany slide presentation. Those 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 #2: Those 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: Thank you, Allison. And good morning, everyone. We delivered record second-quarter results that reflect strong execution across the company and continued momentum across our portfolio.

Alex Alcala: Thank you, Allison, and good morning, everyone. We delivered record Q2 results that reflected strong execution across the company and continued momentum across our portfolio. That excellent performance included solid 5% core sales growth, strong operating leverage, and the continued benefits of our recent acquisition. Momentum continues to build across the company. Total backlog increased 5% sequentially during the quarter, with core sequential backlog growth across both segments, providing further visibility and confidence as we move into the H2 of the year. Aerospace & Advanced Technologies led the way, delivering 13% core sales growth driven by broad-based strength across both commercial aerospace and defense markets. Backlog also increased to a record of nearly $1.3 billion, with core year-over-year backlog growth of 11%.

Speaker #3: That excellent performance included solid 5% core sales growth, strong operating leverage, and a continued benefit over recent acquisitions. And momentum continues to build across the company.

Speaker #3: Total backlog increased 5% sequentially during the quarter, with core sequential backlog growth across both segments. Providing further visibility and confidence as we move into the second half of the year.

Speaker #3: Aerospace and advanced technologies led the way, delivering 13% core sales growth driven by broad-based strength across both commercial aerospace and defense markets. Backlog also increased to a record of nearly $1.3 billion.

Speaker #3: With core year-over-year backlog growth of 11%. At profit flow technologies, we delivered a second consecutive quarter of sequential core backlog growth. Providing increased visibility and supporting our confidence in a strong second half.

Alex Alcala: At Process Flow Technologies, we delivered a second consecutive quarter of sequential core backlog growth, providing increased visibility and supporting our confidence in a strong H2. Execution remains excellent, with another quarter of adjusted operating margin expansion despite the temporary dilution from our January acquisition. Combined with positive and improving demand trends, this momentum positions us well for the H2 and also as we head into 2027. Overall, operational execution was exceptional. Total company adjusted operating margin expanded 180 basis points to a record 21.3%, driven by strong core margins in both segments impacted by favorable pricing, strong productivity, and disciplined cost management. These results demonstrate our ability to convert growth into meaningful earnings expansion while continuing to invest in the long-term opportunities across the portfolio. The performance of our acquisitions has been outstanding. Integration activities continue to progress ahead of plan.

Speaker #3: Execution remains excellent. With another quarter of adjusted operating margin expansion despite the temporary dilution from our January acquisition. Combined with positive and improving demand trends, this momentum positions us well for the second half and also as we head into 2027.

Speaker #3: Overall, operational execution was exceptional. Total company adjusted operating margin expanded 180 basis points to a record $21.3%. Driven by strong core margins in both segments, impacted by favorable pricing, strong productivity, and disciplined cost management.

Speaker #3: These results demonstrate our ability to convert growth into meaningful earnings expansion while continuing to invest in the long-term opportunities across the portfolio. The performance of our acquisitions has been outstanding.

Speaker #3: Integration activities continue to progress ahead of plan. Operational performance has exceeded our expectations, and we are realizing synergies faster than anticipated, while also identifying new opportunities for growth and margin improvement.

Alex Alcala: Operational performance has exceeded our expectations, we are realizing synergies faster than anticipated, while also identifying new opportunities for growth and margin improvement. With six months now behind us, I'm incredibly pleased with all aspects of the four acquired businesses. All our associates at Panametrics, Druck, Reuter-Stokes, and optek, together with our dedicated integration teams are leveraging these businesses' incredible technology, combined with the process and discipline cadence of the Crane Business System, to achieve results well ahead of plan to date. My thanks to the team for driving it every day. It's clear that our vision for these businesses are becoming some of our best and most profitable businesses in Crane, is materializing well ahead of schedule. As a result, we now expect our recent acquisitions to contribute approximately $0.20 per share to full-year earnings, up from our prior expectation of approximately $0.15 per share.

Speaker #3: With 6 months now behind us, I'm incredibly pleased with all aspects of the four acquired businesses. All our associates at Panametrics, Truck, Rare Stokes, and Optech together with our dedicated integration teams are leveraging these businesses incredible technology combined with the process and discipline cadence of the Crane Business System to achieve results well ahead of plan today.

Speaker #3: And my thanks to the team for driving it every day. It's clear that our vision for these businesses of becoming some of our best and most profitable businesses in Crane is materializing well ahead of schedule.

Speaker #3: As a result, we now expect our recent acquisitions to contribute approximately 20 cents per share to full-year earnings. Up from our prior expectation of approximately 15 cents per share.

Speaker #3: Another clear example of our ability to leverage the Crane Business System in our incredible culture and talent to drive tremendous shareholder value through accelerated inorganic growth.

Alex Alcala: Another clear example of our ability to leverage the Crane Business System and our incredible culture and talent to drive tremendous shareholder value through accelerated inorganic growth. This is incredibly exciting for Crane. Given our strong H1 performance, record backlog levels, and continued confidence in both our core and acquired businesses, we are raising our full-year adjusted EPS outlook by $0.20 at the midpoint, to a range of $6.85 to $7.05 per share. Our updated guidance reflects expectations for core growth near the high end of our long-term framework, continued strong operational execution, and increasing contributions from our recent acquisitions as we build on the momentum established during the H1 of the year. Turning to Aerospace & Advanced Technologies. We just returned from the Farnborough Airshow in the UK.

Speaker #3: This is incredibly exciting for Crane. Given our strong first-half performance, record backlog levels, and continued confidence in both our core and acquired businesses, we are raising our full-year adjusted EPS outlook by 20 cents at the midpoint.

Speaker #3: To a range of $685 to $705 per share. Our updated guidance reflects expectations for core growth near the high end of a long-term framework.

Speaker #3: Continued strong operational execution, and increasing contributions from our recent acquisitions. As we build on the momentum, establish during the first half of the year.

Speaker #3: Turning to aerospace and advanced technologies. We just returned from the Farnborough Airshow in the UK. Our outstanding AAT team included our newest associates from Truck, had another very successful show.

Alex Alcala: Our outstanding AAT team, including our newest associates from Druck, had another very successful show, meeting with key customers and suppliers, and solidifying alignment on a number of key growth initiatives. From a market perspective, things could not be stronger with a combined broad-based demand across both our commercial and military customer base. Our teams continue to gain share among new and exciting customers. For example, in the quarter, we were selected to supply crucial components for the CFM RISE Program. Just last week, we announced that we'll be supplying an innovative brake control system for the Otto Aerospace Phantom 3500 business jet, a solution that leverages Crane's highly modular and adaptable standard system architecture, which enables rapid and low-risk development. Clear examples of our capabilities and our ability to win share on new and growing applications.

Speaker #3: Meeting with key customers and suppliers, and solidifying alignment on a number of key growth initiatives. And from a market perspective, things could not be stronger with a combined broad-based demand across both our commercial and military customer base.

Speaker #3: Our teams continue to gain share among new and exciting customers. For example, in the quarter, we were selected to supply crucial components for the GE RISE program.

Speaker #3: And just last week, we announced that we'll be supplying an innovative brake control system for the Auto Aerospace Phantom 3500 business jet. A solution that leverages Crane's highly modular and adaptable standard system architecture which enables rapid and low-risk development.

Speaker #3: Clear examples of our capabilities and our ability to win share on new and growing applications. Our defense power business, which many of you visited during our investor meeting in Fort Lawrence Beach last year, continues to build momentum.

Alex Alcala: Our defense power business, which many of you visited during our investor meeting in Long Beach last year, continues to build momentum. We are seeing accelerating demand in our power solution for AESA radar platforms, while also expanding our position in emerging vehicle electrification programs. In addition to the XM30 demonstrator win that we previously discussed, we secured additional power content on another hybrid electric combat ground vehicle program during the quarter. Overall, we continue to see strength across the aerospace and defense demand environment. The backlog we've 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 now expect full-year core sales growth for the segment to land just above the high end of our long-term 7% to 9% range.

Speaker #3: We are seeing accelerating demand in our power solutions for ESA radar platforms. While also expanding our precision in emerging vehicle electrification programs. In addition to the XM30 demonstrator wind, that we previously discussed, we secured additional power content on another hybrid electric combat ground vehicle program during the quarter.

Speaker #3: Overall, we continue to see strength across the aerospace and defense demand environment. The backlog we've built along with the new programs and opportunities our aerospace and advanced technologies teams have secured continue to provide us with great visibility well beyond 2026.

Speaker #3: Looking to the balance of the year, we now expect full-year cold sales growth for the segment to land just above the high end of our long-term 7% to 9% range.

Speaker #3: Very confident for yet another outstanding year at aerospace and advanced technologies. Process flow technologies delivered another strong quarter. And we remain confident in our ability to consistently outperform the markets we serve over the long term.

Alex Alcala: Very confident for yet another outstanding year at Aerospace & Advanced Technologies. Process Flow Technologies delivered another strong quarter. We remain confident in our ability to consistently outperform the markets we serve over the long term. Over the past several years, as you know, we have strategically shifted the portfolio towards attractive end markets that align well with our differentiated technologies, strong customer relationships, and leading competitive positions, providing a solid foundation for sustained growth and market share gain. Overall demand for the quarter was in line with our expectations. Execution was strong, driving an 80 basis points improvement in adjusted margins, again, even with the dilutive impact of the acquisitions. Momentum in cryogenics remains strong, driven by capacity needs within the space launch segment. We secured projects for both SpaceX and Blue Origin in the quarter.

Speaker #3: Over the past several years, as you know, we have strategically shifted the portfolio towards attractive end markets that align well with our differentiated technologies: strong customer relationships, and leading competitive positions, providing a solid foundation for sustained growth and market share gains.

Speaker #3: Overall demand for the quarter was in line with our expectations, and execution was strong. Driving an 80 basis points improvement in adjusted margins. Again, even with the dilutive impact of the acquisitions.

Speaker #3: Momentum and cryogenics remain strong, driven by capacity needs within the space launch segment. We secured projects for both SpaceX and Blue Origin in the quarter.

Speaker #3: We continue to win in this market based on our differentiated engineering support and manufacturing services. In nuclear, we continue to support restarts of existing facilities such as Constellation Energy's Crane Clean Energy Center, and we remain well-positioned for future growth given our involvement in the Westinghouse AP-1000 builds in our core business, and for rotor strokes, given their strong positioning in the nuclear space.

Alex Alcala: We continue to win in this market based on our differentiated engineering support and manufacturing services. In nuclear, we continue to support restarts of existing facilities, such as Constellation Energy's Crane Clean Energy Center. We remain well-positioned for future growth given our positioning for Westinghouse AP1000 builds in our core business and for Reuter-Stokes, given their strong positioning in the nuclear space. For the full-year, we expect core growth to be consistent with our initial guidance of flat to up to low single digits, leveraging within our targeted range of 30% to 35% and driving margin expansion despite market headwinds. In summary, we delivered a very strong H1 and continue to build momentum across the portfolio. Our businesses are performing well. Our end markets remain attractive.

Speaker #3: For the full year, we expect core growth to be consistent with our initial guidance of flat to up low single digits, leveraging within our targeted range of 30 to 35 percent, and driving margin expansion despite market headlines.

Speaker #3: In summary, we delivered a very strong first half and continue to build momentum across the portfolio. Our businesses are performing well. Our end markets remain attractive.

Speaker #3: And we are exceptionally well positioned to continue generating strong results and drive further long-term shareholder value. That strong position also provides us with significant strategic flexibility.

Alex Alcala: We are exceptionally well positioned to continue generating strong results and drive further long-term shareholder value. That strong position also provides us with significant strategic flexibility. As we look ahead, acquisitions remain an important lever to further enhance our growth and earnings profile. We remain active in evaluating opportunities and are encouraged by both the quality and breadth of activity across our pipeline. While timing and competitive dynamics are always difficult to predict, we believe we are well-positioned to deploy capital in a disciplined and value-creative manner. Our focus on M&A remains consistent, adding highly engineered, mission-critical technologies that strengthen our existing franchises, increase our exposure to attractive end markets, and support long-term margin expansion. We continue to see strong opportunities across both Aerospace & Advanced Technologies and Process Flow Technologies. Now, let me turn the call over to our CFO, Mr. Rich Maue, for more specifics on the quarter.

Speaker #3: As we look ahead, acquisitions remain an important lever to further enhance our growth and earnings profile. We remain active in evaluating opportunities and are encouraged by both the quality and breadth of activity across our pipeline.

Speaker #3: While timing and competitive dynamics are always difficult to predict, we believe we are well positioned to deploy capital in a disciplined and value-creative manner.

Speaker #3: Our focus on M&A remains consistent. Adding highly engineered, mission-critical technologies that strengthen our existing franchises. Increase our exposure to attractive end markets, and support long-term margin expansion.

Speaker #3: We continue to see strong opportunities across both Aerospace & Electronics and Process Flow Technologies. Now, let me turn the call over to our CFO, Mr. Rich Maue, for more specifics on the quarter.

Speaker #2: Thank you, Alex. Another outstanding quarter for Crane. Let me start off with total company results. Total sales were up 26 percent in the quarter compared to last year, with 5 percent core growth, driven primarily by the ongoing strength within the Aerospace and Advanced Technologies segment.

Rich Maue: Thank you, Alex. Another outstanding quarter for Crane. Now let me start off with total company results. Total sales were up 26% in the quarter compared to last year, with 5% core growth driven primarily by the ongoing strength within the Aerospace & Advanced Technologies segment. Sales from our four acquisitions contributed to 20% of the growth in the quarter, which was above expectations. Adjusted operating profit increased 37%, reflecting the impact of the higher core sales, contribution from the acquisitions, productivity, and favorable pricing net of inflation. Another outstanding result. Total core FX neutral backlog was up 7% compared to Q2 of last year and up 5% sequentially, primarily reflecting continued strength at Aerospace & Advanced Technologies, though backlog was up sequentially again at Process Flow Technologies.

Richard Maue: Thank you, Alex. Another outstanding quarter for Crane. Now let me start off with total company results. Total sales were up 26% in the quarter compared to last year, with 5% core growth driven primarily by the ongoing strength within the Aerospace & Advanced Technologies segment. Sales from our four acquisitions contributed to 20% of the growth in the quarter, which was above expectations. Adjusted operating profit increased 37%, reflecting the impact of the higher core sales, contribution from the acquisitions, productivity, and favorable pricing net of inflation. Another outstanding result. Total core FX neutral backlog was up 7% compared to Q2 of last year and up 5% sequentially, primarily reflecting continued strength at Aerospace & Advanced Technologies, though backlog was up sequentially again at Process Flow Technologies.

Speaker #2: Sales from our four acquisitions contributed 20 percent of the growth in the quarter, which was above expectations. Adjusted operating profit increased 37 percent, reflecting the impact of the higher core sales, contribution from the acquisitions, productivity, and favorable pricing net of inflation, another outstanding result.

Speaker #2: And total core FX-neutral backlog was up 7 percent compared to the second quarter of last year, and up 5 percent sequentially, primarily reflecting continued strength at Aerospace and Advanced Technologies, though backlog was up sequentially again at Process Flow Technologies.

Speaker #2: And core orders increased 2 percent year over year, with their Aerospace and Advanced Technologies up 5 percent, and Process Flow Technologies approximately flat. Orders and backlog across the acquisitions were also solid and continue to support a stronger full-year outlook.

Rich Maue: Core orders increased 2% year over year, with Aerospace & Advanced Technologies up 5% and Process Flow Technologies approximately flat. Orders and backlog across the acquisitions were also solid and continuing to support a stronger full-year outlook. We repaid $100 million of debt in the quarter and another $90 million subsequent to the quarter, resulting in pro forma net leverage today at about 1.2x, a very strong balance sheet that positions us well for further M&A. Before discussing segment performance, I wanted to highlight that our adjusted results, both adjusted EPS and adjusted margins exclude a benefit from IEEPA tariff recoveries recorded during the quarter. We believe it is important to isolate these one-time recoveries from the true underlying operating trends in the business. We do not expect any material incremental amounts for the balance of the year.

Richard Maue: Core orders increased 2% year over year, with Aerospace & Advanced Technologies up 5% and Process Flow Technologies approximately flat. Orders and backlog across the acquisitions were also solid and continuing to support a stronger full-year outlook. We repaid $100 million of debt in the quarter and another $90 million subsequent to the quarter, resulting in pro forma net leverage today at about 1.2x, a very strong balance sheet that positions us well for further M&A. Before discussing segment performance, I wanted to highlight that our adjusted results, both adjusted EPS and adjusted margins exclude a benefit from IEEPA tariff recoveries recorded during the quarter. We believe it is important to isolate these one-time recoveries from the true underlying operating trends in the business. We do not expect any material incremental amounts for the balance of the year.

Speaker #2: We repaid $100 million of debt in the quarter and another $90 million subsequent to the quarter, resulting in pro forma net leverage today at about $1.2 times a very strong balance sheet that positions us well for further M&A.

Speaker #2: Before discussing segment performance, I wanted to highlight that our adjusted results—both adjusted EPS and adjusted margins—exclude a benefit from IEPA tariff recoveries recorded during the quarter.

Speaker #2: We believe it is important to isolate these one-time recoveries from the true underlying operating trends in the business. And we do not expect any material incremental amounts for the balance of the year.

Speaker #2: A few more details on the segments in the quarter. Starting with Aerospace and Advanced Technologies, sales of $339 million increased 31 percent in the quarter, with core sales up 13.3 percent.

Rich Maue: A few more details on the segments in the quarter. Starting with Aerospace & Advanced Technologies, sales of $339 million increased 31% in the quarter, with core sales up 13.3%. Our record backlog of nearly $1.3 billion increased 11% on a core basis and increased 20% including Druck. On a sequential basis, core backlog increased 7%. Once again, as reinforced at the air show last week, demand remains very strong across our highly diverse portfolio. In addition to the wins that Alex just talked about, we continue to respond to increasing RFPs and RFQs across several defense programs supporting missile defense and foreign military orders for the F-16 brake control upgrade program continue to grow. Again, continued momentum giving us high confidence in our multi-year outlook. Let me spend a minute on the core business in the quarter.

Richard Maue: A few more details on the segments in the quarter. Starting with Aerospace & Advanced Technologies, sales of $339 million increased 31% in the quarter, with core sales up 13.3%. Our record backlog of nearly $1.3 billion increased 11% on a core basis and increased 20% including Druck. On a sequential basis, core backlog increased 7%. Once again, as reinforced at the air show last week, demand remains very strong across our highly diverse portfolio. In addition to the wins that Alex just talked about, we continue to respond to increasing RFPs and RFQs across several defense programs supporting missile defense and foreign military orders for the F-16 brake control upgrade program continue to grow. Again, continued momentum giving us high confidence in our multi-year outlook. Let me spend a minute on the core business in the quarter.

Speaker #2: Our record backlog of nearly $1.3 billion increased 11 percent on a core basis and increased 20 percent including drug. On a sequential basis, core backlog increased 7 percent.

Speaker #2: Once again, as reinforced at the airshow last week, demand remains very strong across our highly diverse portfolio. In addition to the wins that Alex just talked about, we continue to respond to increasing RFPs and RFQs across several defense programs, supporting missile defense, and military orders. Foreign military orders for the F-16 brake control upgrade program continue to grow.

Speaker #2: Again, continued momentum giving us high confidence in our multi-year outlook. Let me spend a minute on the core business in the quarter. On the OE side, sales remained strong with both commercial and military up double digits, driven by the ramp at our commercial customers as well as ongoing strength within the defense market.

Rich Maue: On the OE side, sales remained strong with both commercial and military up double digits driven by the ramp at our commercial customers as well as ongoing strength within the defense market. Total aftermarket was up 8% in the quarter with growth similar across both commercial and military customers. Taken altogether, we remain very confident in our full-year segment sales outlook and expect full-year core sales growth slightly ahead of our 7% to 9% algorithm. Adjusted segment margin was excellent and above expectations at 25.8% compared to 26.6% last year, down slightly reflecting the expected dilutive impact from the Druck acquisition. This was an outstanding result given Druck's outperformance in the quarter as well as continued strong performance in our core A&E business. Moving to Process Flow Technologies.

Richard Maue: On the OE side, sales remained strong with both commercial and military up double digits driven by the ramp at our commercial customers as well as ongoing strength within the defense market. Total aftermarket was up 8% in the quarter with growth similar across both commercial and military customers. Taken altogether, we remain very confident in our full-year segment sales outlook and expect full-year core sales growth slightly ahead of our 7% to 9% algorithm. Adjusted segment margin was excellent and above expectations at 25.8% compared to 26.6% last year, down slightly reflecting the expected dilutive impact from the Druck acquisition. This was an outstanding result given Druck's outperformance in the quarter as well as continued strong performance in our core A&E business. Moving to Process Flow Technologies.

Speaker #2: Total aftermarket was up 8 percent in the quarter with growth similar across both commercial and military customers. Taken all together, we remain very confident in our full-year segment sales outlook and expect full-year core sales growth slightly ahead of our 7 to 9 percent algorithm.

Speaker #2: Adjusted segment margin was excellent and above expectations at 25.8 percent, compared to 26.6 percent last year, down slightly reflecting the expected dilutive impact from the drug acquisition.

Speaker #2: This was an outstanding result, given the drug's outperformance in the quarter, as well as continued strong performance in our core A&E business. Moving to Process Flow Technologies—in Q2, we delivered sales of $386 million, up 21 percent compared to a year ago, with core sales down 1.4 percent. The acquisitions of Panametrics, Roederstoks, and Optech added nearly 22 points of growth.

Rich Maue: In Q2, we delivered sales of $386 million, up 21% compared to a year ago, with core sales down 1.4% with the acquisitions of Panametrics, Reuter-Stokes, and optek adding nearly 22 points of growth. Foreign exchange contributed 0.8% points of growth in the quarter. Compared to the prior year, core FX neutral backlog at PFT decreased 2%. On a sequential basis improved 2%. Core FX neutral orders were approximately flat, consistent with our expectations. Adjusted operating margin of 22.2% was approximately 80 basis points above last 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 both our core businesses and each acquired business. Productivity continues to read through as well as price net cost. In summary, an excellent quarter. Moving to the non-operational items below the segments.

Richard Maue: In Q2, we delivered sales of $386 million, up 21% compared to a year ago, with core sales down 1.4% with the acquisitions of Panametrics, Reuter-Stokes, and optek adding nearly 22 points of growth. Foreign exchange contributed 0.8% points of growth in the quarter. Compared to the prior year, core FX neutral backlog at PFT decreased 2%. On a sequential basis improved 2%. Core FX neutral orders were approximately flat, consistent with our expectations. Adjusted operating margin of 22.2% was approximately 80 basis points above last 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 both our core businesses and each acquired business. Productivity continues to read through as well as price net cost. In summary, an excellent quarter. Moving to the non-operational items below the segments.

Speaker #2: And foreign exchange contributed 0.8 percent points of growth in the quarter. Compared to the prior year, core FX neutral backlog at PFT decreased 2 percent, but on a sequential basis improved 2 percent.

Speaker #2: And core, FX-neutral orders were approximately flat, consistent with our expectations. Adjusted operating margin of 22.2 percent was approximately 80 basis points above last year, and this was inclusive of the dilutive impact from the recent acquisitions.

Speaker #2: And like aerospace and advanced technologies, results were above our expectations, given better performance across both our core businesses and each acquired business. Productivity continues to read through, as well as price net cost.

Speaker #2: In summary, an excellent quarter. Moving to the non-operational items below the segments, corporate expense for the quarter was $19 million, as expected, and for 2026 we continue to forecast corporate expense to be in a range of $80 to $85 million.

Rich Maue: Corporate expense for the quarter was $19 million as expected. For 2026, we continue to forecast corporate expense to be in a range of $80 to $85 million. Net non-operating expense for the quarter was $17 million. We continue to estimate full-year 2026 net non-operating expense of approximately $58 million. Lastly, we continue to estimate our tax rate for 2026 to approximately 23%. Taking all of this into account, our performance to date, as well as risks and opportunities we see ahead, as Alex mentioned, we are raising our adjusted full-year guidance by $0.20 to a range of $6.85 to $7.05. Looking at the cadence for the H2, we expect Q3 to be similar to Q2, with Q4 modestly lower, reflecting normal historical seasonality. Overall, an outstanding H1. Momentum continues to build.

Richard Maue: Corporate expense for the quarter was $19 million as expected. For 2026, we continue to forecast corporate expense to be in a range of $80 to $85 million. Net non-operating expense for the quarter was $17 million. We continue to estimate full-year 2026 net non-operating expense of approximately $58 million. Lastly, we continue to estimate our tax rate for 2026 to approximately 23%. Taking all of this into account, our performance to date, as well as risks and opportunities we see ahead, as Alex mentioned, we are raising our adjusted full-year guidance by $0.20 to a range of $6.85 to $7.05. Looking at the cadence for the H2, we expect Q3 to be similar to Q2, with Q4 modestly lower, reflecting normal historical seasonality. Overall, an outstanding H1. Momentum continues to build.

Speaker #2: Net non-operating expense the quarter was $17 million and we continue to estimate full year 2026 net non-operating expense of approximately $58 million. And lastly, we continue to estimate our tax rate for 2026 to approximately $23 percent.

Speaker #2: Taking all of this into account, our performance to date as well as risks and opportunities we see ahead, and as Alex mentioned, we are raising our adjusted full-year guidance by 20 cents to a range of $685 to $705, looking at the cadence for the second half, we expect Q3 to be similar to Q2 with Q4 modestly lower, reflecting normal historical seasonality.

Speaker #2: Overall, an outstanding first half and momentum continues to build. And with that strong performance, for anyone considering investing in Crane, or those looking to potentially invest more in Crane, I am reminding you of the wisdom imparted by the award-winning actor Matthew Broderick, playing the fan favorite Ferris Bueller in the movie Ferris Bueller's Day Off.

Rich Maue: With that strong performance, for anyone considering investing in Crane or those looking to potentially invest more in Crane, I am reminding you of the wisdom imparted by the award-winning actor, Matthew Broderick, playing the fan favorite, Ferris Bueller, in the movie Ferris Bueller's Day Off. Life moves pretty fast. If you don't stop and look around once in a while, you could miss it. With that, operator, we are now ready to take our first question.

Richard Maue: With that strong performance, for anyone considering investing in Crane or those looking to potentially invest more in Crane, I am reminding you of the wisdom imparted by the award-winning actor, Matthew Broderick, playing the fan favorite, Ferris Bueller, in the movie Ferris Bueller's Day Off. Life moves pretty fast. If you don't stop and look around once in a while, you could miss it. With that, operator, we are now ready to take our first question.

Speaker #2: Life moves pretty fast. If you don't stop and look around once in a while, you could miss it. And with that, operator, we are now ready to take our first question.

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

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

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

Speaker #1: Thank you. Our first question is coming from Amit Marocha. Please go ahead, your line is now open.

Speaker #3: Thanks, good morning, gentlemen. Appreciate the question. Maybe I just wanted to start on process. Flow, any notable observations in growth trends as you sort of progress through the quarter?

Amit Mehrotra: Thanks. Good morning, gentlemen. Appreciate the question. Maybe I just wanted to start on Process Flow Technologies. Any notable observations in growth trends as you sort of progress through the quarter? I understand organic growth was negative. Organic orders were a little bit negative, maybe any thoughts on any evolution on that rate as you progress through the quarter? Just any expectations around organic growth or core growth for H2 of the year as well. Thank you.

Speaker #3: I understand organic growth was negative, obviously organic orders were a little bit negative, but maybe any thoughts on any evolution on those on that rate as you progress through the quarter.

Speaker #3: And just any expectations around organic growth or core growth for the back half of the year as well? Thank you.

Speaker #4: Yeah, sure, Amit. So we're feeling very positive about PFT in the second half. I think when we went into the year, we expected the first half to be the softest.

Rich Maue: Yeah, sure, Amit. We're feeling very positive about PFT in H2. I think when we went into the year, we expected H1 to be the softest, we are pleased to see two quarters of sequential backlog improvement and sales improvement. As we progressed through the quarter, we saw orders strengthening, I'll speak more about it. The demand trends are very positive in position as well for H2. It could have very well been a positive outcome based on the trends that we've seen from a year-over-year basis. We saw quote activity starting to increase and many areas of strength, including in the chemical production, which is a bit of a new green spout, where we're starting to see customers talk about and report volume growth, in particular in the Americas. All signs are quite positive in H2.

Richard Maue: Yeah, sure, Amit. We're feeling very positive about PFT in H2. I think when we went into the year, we expected H1 to be the softest, we are pleased to see two quarters of sequential backlog improvement and sales improvement. As we progressed through the quarter, we saw orders strengthening, I'll speak more about it. The demand trends are very positive in position as well for H2. It could have very well been a positive outcome based on the trends that we've seen from a year-over-year basis. We saw quote activity starting to increase and many areas of strength, including in the chemical production, which is a bit of a new green spout, where we're starting to see customers talk about and report volume growth, in particular in the Americas. All signs are quite positive in H2.

Speaker #4: And we are pleased to see two quarters of sequential backlog improvement and sales improvement. As we progressed through the quarter, we saw orders strengthening.

Speaker #4: And I'll speak more about it. So the demand trends are very positive, imposition as well for a second half. It could have very well been a positive outcome based on the trends that we've seen from a year-over-year basis.

Speaker #4: We saw quote activity starting to increase. And many areas of strength, including in the chemical production which is a bit of a new green spout, where we're starting to see customers talk about and report volume growth, in particular in the Americas.

Speaker #4: So all signs are quite positive in the second half. I expect PFT to turn positive growth on a year-over-year in the second half, very confident about that with those trends in addition, I think in addition to chemical in the Americas starting to show some positive signs, we continue to see industrial demand be very strong building backlog in our businesses that drive industrial power, power gen.

Rich Maue: I expect PFT to turn positive growth on a year-over-year in H2. Very confident about that with those trends. In addition to chemical in the Americas starting to show some positive signs, we continue to see industrial demand be very strong, building backlog in our businesses that drive industrial power gen in the United States, natural gas combined cycle plants. We continue to build backlog in that area. Water, wastewater, cryogenics. All those trends make me very positive about PFT in H2.

Richard Maue: I expect PFT to turn positive growth on a year-over-year in H2. Very confident about that with those trends. In addition to chemical in the Americas starting to show some positive signs, we continue to see industrial demand be very strong, building backlog in our businesses that drive industrial power gen in the United States, natural gas combined cycle plants. We continue to build backlog in that area. Water, wastewater, cryogenics. All those trends make me very positive about PFT in H2.

Speaker #4: In the United States, natural gas combined cycle plants—we continue to build backlog in that area. Water, wastewater, cryogenics—so all those trends make me very positive about PFT in the second half.

Speaker #3: Great. Got it. That's helpful. And just as a quick follow-up, I noticed kind of your more stronger comments on the M&A pipeline. It does seem across diversified industrials that there has been a recent uptick in activity maybe just give a little bit more color there on kind of if there have been shifts in sort of getting closer to the finish line on stuff.

Amit Mehrotra: Great. Got it. That's helpful. Just as a quick follow-up, I noticed kind of your more stronger comments on the M&A pipeline. It does seem across diversified industrials that there has been a recent uptick in activity. Maybe just give a little bit more color there on kind of if there have been shifts in sort of getting closer to the finish line on stuff. Are you still seeing opportunities sort of like PSI that I know PSI was really kind of three deals in one, so to speak, would be curious to see if you're seeing deals where you can both kind of see accretion on the technology stack as well as sort of meaningful opportunity for margin expansion. If you can just talk about that, I'd appreciate it.

Speaker #3: And are you still seeing opportunities sort of like PSI that I know PSI was really kind of three deals in one, so to speak, but would be curious to see if you're seeing deals where you can both kind of see accretion on the technology stack as well as sort of meaningful opportunity for margin expansion.

Speaker #3: So, if you can just talk about that, we'd appreciate it.

Speaker #4: Yeah. I mean, I think as a general guideline, our focus on any deal that we make—and what investors would expect—is that any deal we make is because we think it's accretive to the growth profile, will become accretive to the margin, and will strengthen our portfolio from a technology standpoint.

Rich Maue: Yeah. I think as a general guideline, our focus on any deal that we make and what investors would expect is that any deal that we make is because we think it's accretive to the growth profile, will become accretive to the margin, will strengthen our portfolio from a technology standpoint, and also will meet the financial hurdle. That is the base expectation of any deal you'll see us. We are seeing our funnels get stronger with deals with those characteristics in both AAT and PFT. In fact, they've never been stronger. Activity is solid. Like I mentioned in my comments, the timing's a bit unpredictable, but we have the debt capacity, we have the management capacity, and I think we're well-aligned to execute on capital deployment and continuing with that momentum. Nothing imminent

Richard Maue: Yeah. I think as a general guideline, our focus on any deal that we make and what investors would expect is that any deal that we make is because we think it's accretive to the growth profile, will become accretive to the margin, will strengthen our portfolio from a technology standpoint, and also will meet the financial hurdle. That is the base expectation of any deal you'll see us. We are seeing our funnels get stronger with deals with those characteristics in both AAT and PFT. In fact, they've never been stronger. Activity is solid. Like I mentioned in my comments, the timing's a bit unpredictable, but we have the debt capacity, we have the management capacity, and I think we're well-aligned to execute on capital deployment and continuing with that momentum. Nothing imminent

Speaker #4: And also will meet the financial hurdle. So, that is the base expectation of any deal you'll see us pursue. We are seeing our funnels get stronger with deals with those characteristics in both AAT and PFT.

Speaker #4: In fact, they've never been stronger so activity is solid. Like I mentioned in my comments, the timing is a bit unpredictable. But we have the debt capacity, we have the management capacity, and I think we're well aligned to execute on capital deployment and continuing that with that momentum.

Speaker #4: Nothing imminent. To talk about right now, but feel optimistic about it.

Amit Mehrotra: Got it.

Rich Maue: to talk about right now, but feel optimistic about it.

Richard Maue: to talk about right now, but feel optimistic about it.

Speaker #3: Okay. Wonderful. Thank you for taking the questions. Appreciate it.

Amit Mehrotra: Okay, wonderful. Thank you for taking the questions. Appreciate it.

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

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

Matt Summerville: Thanks. Two questions both on AAT. Can you help me or help us think about how best to frame the opportunity you could see ahead with all of this missile rearmament and incremental militarization around THAAD, Patriot, Tomahawk, et cetera? Kind of discuss your exposures and how you think about that opportunity as part of your go forward kind of organic potential. Then I have a follow-up.

Speaker #5: Thanks. Two questions, both on AAT. Can you help me or help us think about how best to frame the opportunity you could see ahead with all of this missile rearmament and incremental militarization around FAD, Patriot, Tomahawk, etc., etc.?

Speaker #5: Could you discuss your exposures and how you think about that opportunity as part of your go-forward, organic potential? And then I have a follow-up.

Speaker #4: Yeah. Thanks, Matt. So on missile demand, we see about 35 million dollars of content today. We're on over 10 programs including those that you mentioned.

Alex Alcala: Yeah. Thanks, Matt. On missile demand, we see about $35 million of content today. We're on over 10 programs, including those that you mentioned. We're seeing strong demand today increasing. We're also seeing from our customers, RFQ activity and forecast that would expand four or five times that rate, going to the end of the decade. We are in pretty good position. A lot of our electronic power, mod power, microwave content, and we don't have any capacity constraints to supply that demand. Pretty good upside for us in that area.

Speaker #4: We're seeing strong demand today. Increasing. But we're also seeing from our customers RFQ activity and forecasts that would expand four or five times that rate.

Speaker #4: Going to the end of the decade, we are in a pretty good position. A lot of our electronic power, mod power, and microwave content—we don't have any capacity constraints to supply that demand.

Speaker #4: So, pretty good upside for us in that area.

Speaker #3: Yeah. Just to add, to that a little bit, because of the capacity that Alex mentioned, we're actually getting incremental quotes for potential content wins from others.

Rich Maue: Yeah. Just to add to that a little bit. Because of the capacity that Alex mentioned, we're actually getting incremental quotes for potential content wins from others. Not just growth from existing platforms. Another opportunity, I would say, beyond market for us.

Richard Maue: Yeah. Just to add to that a little bit. Because of the capacity that Alex mentioned, we're actually getting incremental quotes for potential content wins from others. Not just growth from existing platforms. Another opportunity, I would say, beyond market for us.

Speaker #3: So, not just growth from existing platforms. So, another opportunity, I would say, beyond market for us.

Matt Summerville: Understood. Maybe if you guys could speak to how you're presently thinking about the durability of the commercial aftermarket cycle and overall demand therein. Seems like maybe you were expecting a little bit of maybe geopolitical-induced demand destruction, that doesn't seem to be coming to fruition. How would you kind of recalibrate how you're viewing that business today? Thank you.

Speaker #5: Understood. And maybe if you guys could speak to how you're presently thinking about the durability of the commercial aftermarket cycle and overall demand therein.

Speaker #5: It seemed like maybe you were expecting a little bit of, maybe, geopolitical-induced demand destruction, but that doesn't seem to be coming to fruition. So, how would you kind of recalibrate how you're viewing that business today?

Speaker #5: Thank you.

Speaker #3: Yeah, Matt, I would say just overall, demand is solid—remains solid, right? If you step back and look at our aftermarket positioning, think of us as $55 to $60 million in revenue a quarter in commercial aftermarket.

Rich Maue: Yeah, Matt. I would say, just overall, demand is solid, remains solid, right? If you step back and you look at our aftermarket positioning, think of us as $55 to 60 million in revenue a quarter in commercial aftermarket. That's incremental. As you know, we have military, on the commercial side. That's the way to think about our consistent level of demand through the balance of this year. We would expect commercial aftermarket to continue in the mid-single to upper mid-single rate as you look further out. That's our current view. Overall, for this year, solid, consistent demand levels, and that's incorporated in our updated guidance.

Richard Maue: Yeah, Matt. I would say, just overall, demand is solid, remains solid, right? If you step back and you look at our aftermarket positioning, think of us as $55 to 60 million in revenue a quarter in commercial aftermarket. That's incremental. As you know, we have military, on the commercial side. That's the way to think about our consistent level of demand through the balance of this year. We would expect commercial aftermarket to continue in the mid-single to upper mid-single rate as you look further out. That's our current view. Overall, for this year, solid, consistent demand levels, and that's incorporated in our updated guidance.

Speaker #3: That's incremental. As you know, we have military, but on the commercial side, that's the way to think about our consistent level of demand through the balance of this year.

Speaker #3: We would expect commercial aftermarket to continue in the mid-single to upper mid-single rate as you look further out. That's our current view. But overall, for this year, solid, consistent, demand levels.

Speaker #3: And that's incorporated in our updated guidance.

Speaker #5: Thank you.

Matt Summerville: Thank you.

Operator: Thank you. We'll take our next question from Scott Deuschle with Deutsche Bank. Please go ahead. Your line is now open.

Speaker #1: Thank you. We'll take our next question from Scott Doishel with the Deutsche Bank. Please go ahead. Your line is now open.

Speaker #4: Hi, Scott.

Rich Maue: Hi, Scott.

Richard Maue: Hi, Scott.

Scott Deuschle: Hi, good morning. Rich-

Speaker #6: Hi. Good morning.

Speaker #3: Rich, can you just update us more broadly on how you're thinking about growth by end market with an AAT for the year?

Rich Maue: Morning

Richard Maue: Morning

Scott Deuschle: Can you just update us more broadly on how you're thinking about growth by end market within AAT for the year?

Speaker #4: Yeah, sure. So I mean, look, we're seeing good momentum across all areas. As you know, our portfolio is quite broad. Commercial, OE, commercial aftermarket, middle OE, middle aftermarket.

Rich Maue: Yeah, sure. Look, we're seeing good momentum across all areas. As you know, our portfolio is quite broad. Commercial OE, commercial aftermarket, mil OE, mil aftermarket. As we were looking at our guide of seven to nine and us now raising that a bit, it is more widespread. It's not necessarily more in any of those individual categories. We're seeing it more broadly. Build rates from the commercial OEs consistent with what we thought, but performing slightly better. On the aftermarket on both sides, just given the overall activity, continues to be pretty solid.

Richard Maue: Yeah, sure. Look, we're seeing good momentum across all areas. As you know, our portfolio is quite broad. Commercial OE, commercial aftermarket, mil OE, mil aftermarket. As we were looking at our guide of seven to nine and us now raising that a bit, it is more widespread. It's not necessarily more in any of those individual categories. We're seeing it more broadly. Build rates from the commercial OEs consistent with what we thought, but performing slightly better. On the aftermarket on both sides, just given the overall activity, continues to be pretty solid.

Speaker #4: As we were looking at our guide of 7 to 9, and us now raising that a bit, it is more widespread. So it's not necessarily more in any of those individual categories.

Speaker #4: We're seeing it more broadly. So build rates from the commercial OEs consistent with what we thought, but performing slightly better. And then on the aftermarket, on both sides, just given the overall activity, continues to be pretty solid.

Speaker #3: Okay. And then, does the second half guide for PFT contemplate volume growth as well as price, or is it just price-driven?

Scott Deuschle: Okay. Does the H2 guide for PFT contemplate volume growth as well as price, or is it just price driven?

Speaker #4: Well, we're going to see both. We're going to show volume growth in the third quarter, fourth quarter, and the full second half as well.

Alex Alcala: We're going to see both. We're going to show volume growth in Q3, Q4, and the full H2 as well.

Speaker #3: Okay. So if they're both positive, should we see mid-single digit type PFT organic growth in the second half?

Scott Deuschle: Okay. If they're both positive, should we see mid-single digit type PFT organic growth in the H2?

Speaker #4: I think for the full year, I mean, you can do the math, but we're still expecting to be flat to low single digits. So, that has some implications here in the second half.

Alex Alcala: I think for the full year, you can do the math, but we're still expecting to be flat to low single digits. That has some implications here in the H2. We are going to go positive on a year-over-year.

Speaker #4: We are going to go positive on a year-over-year basis.

Speaker #3: Okay. And then, I guess, is three to five percent long-term core growth for PFT still the right framework? And if so, what needs to change in the operating environment to get back there, or are you already seeing the change that you need to see to get to that three to five?

Scott Deuschle: Okay. I guess, just is 3% to 5% long-term core growth for PFT still the right framework? If so, what needs to change in the operating environment to get back there? Or are you already seeing the change that you need to see to get to that 3% to 5%?

Speaker #4: Yeah. I mean, if you go back in history, yeah, the three to five is still a good number. If you go back in history, during the last cycles and downturns, right, like 2014, '15, before we repositioned the portfolio, during these cycles, we would be down seven, eight percent on the top line.

Alex Alcala: Yeah. If you go back in history, yeah, the 3% to 5% is still a good number. If you go back in history, during the last cycles and downturns, right? Like 2014, 2015, before we repositioned the portfolio. During these cycles, we would be down 7%, 8% on the top line. We've been going through this trough, in particular in the chemical markets. You can see that we outperformed 4% or 5%. Last year we were closer to 1% flat. The portfolio has changed significantly where during the cycle we don't see that hard dip. We feel good about that 3% to 5%. It will only get stronger as we do acquisitions and continue to invest organically in our higher growth markets. I think that's a solid number to keep thinking about.

Speaker #4: We've been going through this trough, particularly in the chemical markets. You can see that we outperformed by four or five percent last year. Now, we're closer to one percent—flat.

Speaker #4: So we note the portfolio has changed significantly. Where we are during the cycle, we don't see that hard dip, so we feel good about that 3% to 5%.

Speaker #4: It'll only get stronger as we do acquisitions and continue to invest organically in our higher-growth markets. So, I think that's a solid number to keep thinking about.

Speaker #3: Thank you.

Scott Deuschle: Thank you.

Speaker #1: Thank you. We'll take our next question from Nathan Jones. What's the full? Please go ahead. Your line is open.

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

Speaker #4: Hi, Nathan.

Rich Maue: Hi, Nathan.

Richard Maue: Hi, Nathan.

Speaker #6: Hi, everyone. I guess my first question is for Rich. The question isn't, what are we going to do? The question is, what aren't we going to do?

Nathan Jones: Morning, everyone.

Rich Maue: Morning.

Richard Maue: Morning.

Nathan Jones: I guess my first question is for Rich. The question isn't what are we going to do, the question is what aren't we going to do? I'm trying to get myself a Crane coffee mug.

Speaker #6: I'm trying to get myself a Crane coffee mug.

Speaker #4: Real.

Speaker #3: You will get one, Nathan. Just three attempts. And because you know I'm still wrong.

Rich Maue: You'll get one, Nathan. Just make attempt because you know it so well.

Richard Maue: You'll get one, Nathan. Just make attempt because you know it so well.

Speaker #4: Real question. You talked about,

Nathan Jones: Real question. You talked about flat to low single-digit growth in PFT for the full year, which implies probably low single-digit growth in H2. Still talked about 35% incremental margins. You did have a step-up in margins H2 last year, around 23% for H2 of last year in PFT. Should we expect that kind of low single-digit leverage coming from that level, which would imply kind of 100 basis points step-up in PFT margins in H2 versus H1? Am I thinking about it wrong?

Speaker #6: flat to low single digit growth in PFT for the full year, which you guys probably low single digit growth in the second half. And still talked about 35% incremental margins.

Speaker #6: You did have a step up in margins second half last year, around 23% for the second half of last year in PFT. Should we expect that kind of low single digit leverage coming from that level, which would imply kind of 100 basis points step up in PFT margins in the second half versus the first half?

Speaker #6: Or am I thinking about it wrong?

Speaker #3: Yeah. Look, what I would say, Nathan, is we are going to see continued strong operating leverage in the second half. We had an outstanding performance in the first half across all of PFT.

Rich Maue: Yeah. Look, what I would say, Nathan, is we are going to see continued strong operating leverage in H2. We had an outstanding performance in H1 across all of PFT. If you just do straight maths, almost incalculable, right? Just excellent performance in driving margins, notwithstanding the top-line headwinds. When we do see the volumes come through in H2, I would expect us to leverage north of our stated leverage rate for the segment. It'll be a very strong performance in H2.

Richard Maue: Yeah. Look, what I would say, Nathan, is we are going to see continued strong operating leverage in H2. We had an outstanding performance in H1 across all of PFT. If you just do straight maths, almost incalculable, right? Just excellent performance in driving margins, notwithstanding the top-line headwinds. When we do see the volumes come through in H2, I would expect us to leverage north of our stated leverage rate for the segment. It'll be a very strong performance in H2.

Speaker #3: If you just do straight math, it's almost incalculable, right? But just excellent performance in driving margins, notwithstanding the top-line headwinds. So then, when we do see the volumes come through in the second half, I would expect us to leverage north of our stated—it'll be a very strong performance in the second half.

Speaker #6: Okay. I guess my follow-up question is around the acquisitions that you've made here. You were pretty positive on the fourth quarter call just after you'd closed it, positive on the first quarter call, positive again here on the second quarter call.

Nathan Jones: Okay. I guess my follow-up question is around the acquisitions that you've made here. You were pretty positive on the Q4 call just after you closed it, positive on the Q1 call, positive again here on the Q2 call. I'm just thinking about this from a longer-term basis. I think when you bought the PSI business, at least, it was kind of a five-year timeframe to get to 10% ROI. With what you've learned so far about these businesses, is this kind of we can get to 10% ROI faster than five years? We can end up with a higher ROI in five years? How should we be thinking about that these days?

Speaker #6: I'm just thinking about this from a longer-term basis. I think when you bought these business PFT business PSI business, sorry, at least, it was kind of a five-year timeframe to get to 10% ROI.

Speaker #6: With what you've learned so far about these businesses, is this something where we can get to 10% ROI faster than five years? Could we end up with a higher ROI in five years?

Speaker #6: How should we be thinking about that these days?

Speaker #4: Yeah, Nathan. We're definitely going to get there faster. So if you remember, we were talking about going from like 58 million of EBITDA to close to 150 million.

Rich Maue: Yeah, Nathan. We're definitely going to get there faster. If you remember, we were talking about going from $58 million of EBITDA to close to $150 million by year five. We're ahead of schedule, maybe a year and a half on what we expected. We're seeing just upside opportunities on the growth side, which we didn't bake into our model going in on the productivity cost out. Just in all aspects, the teams are doing an outstanding job. We will be there earlier than originally thought. If you remember when we went into the year, we thought we would grow 4% to 6%, improve 200 basis points. We revised that to 300 basis points. Now I'm thinking we're going to be over on the growth side of our guide over the 4% to 6%.

Richard Maue: Yeah, Nathan. We're definitely going to get there faster. If you remember, we were talking about going from $58 million of EBITDA to close to $150 million by year five. We're ahead of schedule, maybe a year and a half on what we expected. We're seeing just upside opportunities on the growth side, which we didn't bake into our model going in on the productivity cost out. Just in all aspects, the teams are doing an outstanding job. We will be there earlier than originally thought. If you remember when we went into the year, we thought we would grow 4% to 6%, improve 200 basis points. We revised that to 300 basis points. Now I'm thinking we're going to be over on the growth side of our guide over the 4% to 6%.

Speaker #4: By year five, we're ahead of schedule—maybe a year and a half on what we expected. We're seeing just upside opportunities on the growth side, which we didn't bake into our model going in, and on the productivity cost-out. Just in all aspects, the teams are doing an outstanding job.

Speaker #4: So we will be there earlier than originally thought. So if you remember when we went into the year, we thought we were grow 4 to 6 percent, improved 200 basis points.

Speaker #4: Then we revised that to 300 basis points. Now, I'm thinking we're going to be over on the growth side of our guide over the four to six.

Speaker #4: It's going to be above that, and it's going to be more than the 300 basis points of improvement—maybe 350 basis points or higher this year.

Rich Maue: It's going to be above that, and it's going to be more than the 300 basis points of improvement, maybe 350 basis points or higher this year. That gives you a sense of the pace of improvement. We have good momentum going into next year as well to continue to drive improvement action.

Richard Maue: It's going to be above that, and it's going to be more than the 300 basis points of improvement, maybe 350 basis points or higher this year. That gives you a sense of the pace of improvement. We have good momentum going into next year as well to continue to drive improvement action.

Speaker #4: So that gives you a sense of the pace of improvement that and we have good momentum going into next year as well to continue to drive improvement actions.

Speaker #3: Great. Thanks for taking the questions.

Nathan Jones: Great. Thanks for taking the question.

Speaker #4: Thanks.

Rich Maue: Thanks.

Richard Maue: Thanks.

Speaker #1: Thank you. We'll take our next question from Dan DiCicco with BMO Capital Markets. Please go ahead. Your line is open.

Operator: Thank you. We'll take our next question from Dan Ippolito with BMO Capital Markets. Please go ahead. Your line is open.

Operator: Thank you. We'll take our next question from Dan DiCicco with BMO Capital Markets. Please go ahead. Your line is open.

Speaker #4: Hey, Dan.

Rich Maue: Hey, Dan.

Richard Maue: Hey, Dan.

Rich Maue: Great. Thank you. Hello. Thank you for taking my question. Just maybe building off that last question, could we talk about some of those potential commercial opportunities or growth areas that are potentially exciting with that acquisition?

Dan DiCicco: Great. Thank you. Hello. Thank you for taking my question. Just maybe building off that last question, could we talk about some of those potential commercial opportunities or growth areas that are potentially exciting with that acquisition?

Speaker #3: Great. Thank you.

Speaker #5: Hello, thank you for taking my question. So maybe building off that last question, could we talk about some of those potential commercial opportunities or growth areas that are potentially exciting with that acquisition?

Speaker #4: Yeah, for sure. I mean, for starters, I think I mentioned in prior calls, one of the part of our playbook is to quickly refresh the strategic plan and drive strategy deployment.

Rich Maue: Yeah, for sure. For starters, I think I mentioned in prior calls, part of our playbook is to quickly refresh the strategic plan and drive strategy deployment. There's a number of new NPDs that are self-funded that will be launched in the years ahead, starting next year, that we think will accelerate. I think we've identified various regional commercial opportunities where we have opportunity to drive share in the different businesses. On the Druck Aerospace side, there's a lot of synergies between our A&E business and Druck on growth of new programs. We're starting to see opportunities to gain share there as well. All these things will become upsides to original thinking.

Richard Maue: Yeah, for sure. For starters, I think I mentioned in prior calls, part of our playbook is to quickly refresh the strategic plan and drive strategy deployment. There's a number of new NPDs that are self-funded that will be launched in the years ahead, starting next year, that we think will accelerate. I think we've identified various regional commercial opportunities where we have opportunity to drive share in the different businesses. On the Druck Aerospace side, there's a lot of synergies between our A&E business and Druck on growth of new programs. We're starting to see opportunities to gain share there as well. All these things will become upsides to original thinking.

Speaker #4: So there's a number of new NPDs that are self-funded, that will be launched in the years ahead, starting next year, that we think will accelerate. I think we've identified various regional commercial opportunities where we have opportunity to drive share in the different businesses.

Speaker #4: And then on the drug, aerospace side, there's a lot of synergies between our A and E business and drug on growth of new programs we're starting to see opportunities to gain share.

Speaker #4: There as well. So all these things will become upside to our original thinking.

Dan Ippolito: Great. Just one more. I think you highlighted just share gains and some recent wins in AAT. Maybe just if you could touch on, what do you think is enabling that for the business? Or what are you doing on the commercial front that's allowing that to happen? Thank you.

Dan DiCicco: Great. Just one more. I think you highlighted just share gains and some recent wins in AAT. Maybe just if you could touch on, what do you think is enabling that for the business? Or what are you doing on the commercial front that's allowing that to happen? Thank you.

Speaker #5: Great. Great. And then just one more. So I think you highlighted just share gains and some recent wins in AAT. So maybe just if you could touch on what do you think is enabling that for the business?

Speaker #5: Or what are you doing on the commercial front that's allowing that to happen? Thank you.

Speaker #4: Yeah, I think something that we've done well over the last decade and that Max was very adamant about was to continue to invest through the cycles.

Rich Maue: Yeah, I think something that we've done well over the last decade, and that Max was very adamant about, was to continue to invest through the cycles. We continued to invest in engineering through COVID, through the ups and downs, through the slow demand, we have this advantage on speed, scalable, modular, that allows us to move fast on these demonstrators accurately at a reasonable cost. We're on every demonstrator for the US Air Force. We're on the new CCA opportunities. We're gaining share on the private jets. Vehicle electrification, radar, and I think that's been the major key, just that continued investment through the cycles that have put us in this good position to win.

Richard Maue: Yeah, I think something that we've done well over the last decade, and that Max was very adamant about, was to continue to invest through the cycles. We continued to invest in engineering through COVID, through the ups and downs, through the slow demand, we have this advantage on speed, scalable, modular, that allows us to move fast on these demonstrators accurately at a reasonable cost. We're on every demonstrator for the US Air Force. We're on the new CCA opportunities. We're gaining share on the private jets. Vehicle electrification, radar, and I think that's been the major key, just that continued investment through the cycles that have put us in this good position to win.

Speaker #4: So we continue to invest in engineering through COVID, through the ups and downs, through the slow demand. And we have this advantage on speed scalable, modular that allows us to move fast on these demonstrators, accurately at a reasonable cost.

Speaker #4: And we're on every demonstrator for the U.S. Air Force. We're on the new CCA opportunities. We're gaining share on the private jets, and vehicle electrification, radar—and I think that's been the major key.

Speaker #4: It's just that continued investment through the cycles that have put us in this good position to win.

Speaker #5: Great. Thank you so much.

Dan Ippolito: Great. Thank you so much.

Dan DiCicco: Great. Thank you so much.

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

Operator: Thank you. We'll take our next question from Myles Walton with Wolfe Research. Please go ahead. Your line is open.

Speaker #3: Thanks. Rich, can you size the dilution in the two segments from the deals since January?

Myles Walton: Thanks.

Rich Maue: Hi, Myles.

Richard Maue: Hi, Myles.

Myles Walton: Rich, can you size the dilution in the two segments from deals since January?

Speaker #4: From a margin perspective overall, you're referring to, or...? Yeah. So, if you—I'll speak to the quarter just to give you a sense, right?

Rich Maue: From a margin perspective overall, you're referring to, or?

Richard Maue: From a margin perspective overall, you're referring to, or?

Myles Walton: Yeah.

Rich Maue: Yeah. I'll speak to the quarter just to give you a sense, right?

Richard Maue: Yeah. I'll speak to the quarter just to give you a sense, right?

Speaker #4: So, we would be probably close to 100 basis points, or we were in Q2 close to 100 basis points better in Aerospace and Advanced Technologies.

Myles Walton: Yep

Rich Maue: We would be probably close to 100 basis points, or we were in Q2, close to 100 basis points better in Aerospace & Advanced Technologies. If you looked at PFT, we'd be closer to I think we disclosed on the call 80 basis points with the dilutive impact. It would be closer to 160 excluding. The degree of performance on the underlying business is exceptional, is what I would say. I would also say that we expected further dilution coming from the deals. They are performing better. Each of the acquisitions are performing better, and our core underlying business is performing better. In Q1, I think the numbers are similar. I don't have them in front of me, but I would say that they're similar in Q1.

Richard Maue: We would be probably close to 100 basis points, or we were in Q2, close to 100 basis points better in Aerospace & Advanced Technologies. If you looked at PFT, we'd be closer to I think we disclosed on the call 80 basis points with the dilutive impact. It would be closer to 160 excluding. The degree of performance on the underlying business is exceptional, is what I would say. I would also say that we expected further dilution coming from the deals. They are performing better. Each of the acquisitions are performing better, and our core underlying business is performing better. In Q1, I think the numbers are similar. I don't have them in front of me, but I would say that they're similar in Q1.

Speaker #4: And if you looked at PFT, we'd be closer to, I think we disclosed in the call, 80 basis points with the dilutive impact. It would be closer to 160, excluding.

Speaker #4: So the degree of performance on the underlying business is exceptional. It's what I would say. But I would also say that we expected further dilution coming from the deals they are performing better.

Speaker #4: So each of the acquisitions are performing better. And our core underlying business is performing better. In the first quarter, I think the numbers are similar.

Speaker #4: I don't have them in front of me, but I would say that they're similar in the first quarter.

Speaker #3: Okay. And then within PFT?

Myles Walton: Okay. Then within PFT.

Rich Maue: I think they'll be a little bit behind what we did in Q2, just given momentum with the deals.

Richard Maue: I think they'll be a little bit behind what we did in Q2, just given momentum with the deals.

Speaker #4: Maybe a little bit behind what we did in Q2, just given momentum with the deals.

Speaker #3: Okay. And then within PFT, the implied expansion—from a bucket of price, cost, and mix—where should we think the most amount of that came from?

Myles Walton: Within PFT, the implied expansion from a bucket of price, cost, and mix, where should we think the most amount of that came from?

Speaker #4: In terms of outperforming?

Rich Maue: In terms of outperformance?

Richard Maue: In terms of outperformance?

Speaker #3: Core margin. Core margin expansion year on year.

Myles Walton: Core margin expansion year on year.

Speaker #4: Yeah, I mean, just continued strong productivity, cost, price, net cost—just solid. I would say that. And as Alex pointed out, as we were moving through the quarter, from an orders perspective, it was getting stronger.

Rich Maue: Yeah. Just continued strong productivity, cost, price, net cost, just solid. I would say that, and as Alex pointed out, as we were moving through the quarter, from an orders perspective, getting stronger, and we also did a little bit better as we were moving through the quarter from a top-line point of view. A little bit of leverage on volume, too. Yeah.

Richard Maue: Yeah. Just continued strong productivity, cost, price, net cost, just solid. I would say that, and as Alex pointed out, as we were moving through the quarter, from an orders perspective, getting stronger, and we also did a little bit better as we were moving through the quarter from a top-line point of view. A little bit of leverage on volume, too. Yeah.

Speaker #4: And we also did a little bit better as we were moving through the quarter from a top-line point of view, so a little bit of leverage on volume, too.

Myles Walton: And then-

Speaker #4: And I'm very pleased with that performance just to add with the we were smart in understanding the inflation headwinds that would come from the current conflict in the Middle East and the teams were able to quickly get ahead of that.

Rich Maue: Very pleased with that performance. Just to add with. We were smart in understanding the inflation headwinds that would come from the current conflict in the Middle East, the teams were able to quickly get ahead of that. Very pleased that we're able to drive margin expansion even with increased inflation that we're seeing in freight and other areas. I think very strong execution from the teams.

Richard Maue: Very pleased with that performance. Just to add with. We were smart in understanding the inflation headwinds that would come from the current conflict in the Middle East, the teams were able to quickly get ahead of that. Very pleased that we're able to drive margin expansion even with increased inflation that we're seeing in freight and other areas. I think very strong execution from the teams.

Speaker #4: So very pleased that we're able to drive margin expansion even with increased inflation that we're seeing in freight and other areas. So I think very strong execution from the teams.

Speaker #5: Okay.

Myles Walton: Yeah. One last one, if I could. The extra nickel from the deals, was it mostly out of Truck and Aero, or mostly out of PFT?

Speaker #3: And one last one, if I could. The extra nickel from the deals—was it mostly out of Drug and Aero, or mostly out of PFT?

Speaker #4: Yeah, all three businesses—yeah, all three businesses are outperforming.

Rich Maue: Yeah.

Richard Maue: Yeah.

Alex Alcala: All three businesses.

Rich Maue: Yeah.

Richard Maue: Yeah.

Dan Ippolito: All three businesses are outperforming.

Richard Maue: All three businesses are outperforming.

Speaker #3: Okay. Thank you. All right. All right. Thank you.

Myles Walton: Okay. Thank you. All right. Thank you.

Speaker #4: Thank you.

Rich Maue: Thank you.

Richard Maue: Thank you.

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

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

Speaker #5: Hi. Morning, all.

Justin Ages: Hi. Morning, all.

Speaker #4: Hi, Jeff. Morning.

Rich Maue: Hi there, morning.

Richard Maue: Hi there, morning.

Justin Ages: You gave a bit more color on nuclear. I was just wondering if you've seen any activity related to kind of expanding the capabilities. One of the things you had mentioned in the past was now that they've been unshackled from their previous owner, you were looking into alternate revenue streams there.

Speaker #5: You gave a bit more color on Nuclear, and I was just wondering if you've seen any activity related to kind of expanding the capabilities. Because one of the things you had mentioned in the past was, now that they've been unshackled from their previous owner, you were looking into alternate revenue streams there.

Speaker #4: Yeah. So, for World of Stokes, I mean, we're seeing strong demand today—from the restart, license expansions, and so forth. We are investing for the future in technologies that will get us more into pressurized water reactors.

Rich Maue: Yeah. For Reuter-Stokes, we're seeing strong demand today from the restart license expansions and so forth. We are investing for the future in technologies that will get us more into pressurized water reactors. As you may recall, we have a very strong position in boiling water reactors, and there's opportunity to go beyond that. There's new product development and strategies to expand. That'll play out in the years ahead. Reuter-Stokes was already investing pre-acquisition in SMRs, so they have a very strong position with one of the key leaders. There's a lot of good stuff going on that'll play out here in the future for them. Also seeing the strength of their demand today. Justin, just to add, and I think maybe part of your question is getting at the tie back to the Baker Hughes business and GE and the legacy.

Richard Maue: Yeah. For Reuter-Stokes, we're seeing strong demand today from the restart license expansions and so forth. We are investing for the future in technologies that will get us more into pressurized water reactors. As you may recall, we have a very strong position in boiling water reactors, and there's opportunity to go beyond that. There's new product development and strategies to expand. That'll play out in the years ahead. Reuter-Stokes was already investing pre-acquisition in SMRs, so they have a very strong position with one of the key leaders. There's a lot of good stuff going on that'll play out here in the future for them. Also seeing the strength of their demand today. Justin, just to add, and I think maybe part of your question is getting at the tie back to the Baker Hughes business and GE and the legacy.

Speaker #4: As you may recall, we have a very strong position in boiled water reactors. And there's opportunity to go beyond that. So there's new product development and strategies to expand.

Speaker #4: That will play out in the years ahead. World of Stokes was already investing pre-acquisition in SMRs. So they have a very strong position with one of the key leaders.

Speaker #4: So there's a lot of good stuff going on that'll play out here in the future for them. But also seeing the strength of their demand today.

Speaker #5: Justin, I just want to add, and I think maybe part of your question is getting at the tie back to the Baker Hughes business and GE and the legacy.

Speaker #5: So, I would say yes. As well as looking beyond those relationships that were historically solidified, we're looking at other opportunities beyond that, right? So, strategically, expanding our footprint of opportunities to others.

Rich Maue: I would say yes, as well as looking beyond those relationships that were historically solidified. We're looking at other opportunities beyond that. Right? Strategically expanding our footprint of opportunities to others. That is absolutely something that we're focused on. Aero derivatives is an end market, right, that I think we've been asked about, or it might have been yourself or others. That's a perfect example where there's opportunities beyond the legacy relationship in what we see as a pretty nice growth market.

Richard Maue: I would say yes, as well as looking beyond those relationships that were historically solidified. We're looking at other opportunities beyond that. Right? Strategically expanding our footprint of opportunities to others. That is absolutely something that we're focused on. Aero derivatives is an end market, right, that I think we've been asked about, or it might have been yourself or others. That's a perfect example where there's opportunities beyond the legacy relationship in what we see as a pretty nice growth market.

Speaker #5: That is absolutely something that we're focused on. Aero derivatives is an end market, right? I think we've been asked about or it might have been yourself or others at the perfect example.

Speaker #5: Where there's opportunities beyond the legacy relationship, in what we see is a pretty nice growth market. That's very helpful, thank you. And then, can you just refresh us on capital allocation priorities?

Justin Ages: That's very helpful. Thank you. Can you just refresh us on capital allocation priorities? You paid down debt after the quarter ended. What's your target leverage range now?

Speaker #5: You paid down debt. You paid down debt after the quarter ended. What's your target leverage range now?

Speaker #4: Yeah. I mean, we would target between 2 and 3 times. Clearly, we're below that now. Our priority is M&A, number one. First and foremost.

Rich Maue: Yeah. We would target between two and three times. Clearly, we're below that now. Our priority is M&A, number one, first and foremost. I would think about us as deploying our capital to M&A. Certainly we'll pay down debt as well as part of expanding our capacity, but sort of fungible when you think of it from that perspective. We'll buy back shares when we think it's the right time to buy back shares. Right now it's all about M&A.

Richard Maue: Yeah. We would target between two and three times. Clearly, we're below that now. Our priority is M&A, number one, first and foremost. I would think about us as deploying our capital to M&A. Certainly we'll pay down debt as well as part of expanding our capacity, but sort of fungible when you think of it from that perspective. We'll buy back shares when we think it's the right time to buy back shares. Right now it's all about M&A.

Speaker #4: So, I would think about us as deploying our capital to M&A. Certainly, we'll pay down debt as well, as part of expanding our capacity.

Speaker #4: But sort of fungible when you think of it from that perspective. And we'll buy back shares when we think it's the right time to buy back shares.

Speaker #4: But right now, it's all about M&A.

Speaker #5: Great. Thank you.

Justin Ages: Great. Thank you.

Speaker #1: Thank you. And once again, if you would like to ask a question, please press star one on your telephone keypad now. We'll take our next question from Jeff Sprague with Vertical Research.

Operator: Once again, if you would like to ask a question, please press star one on your telephone keypad now. We'll take our next question from Jeff Sprague with Vertical Research. Please go ahead. Your line is open.

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

Speaker #4: Hey, thanks. Good morning, everyone.

Jeff Sprague: Hey, thanks. Good morning, everyone.

Speaker #5: Good morning.

Alex Alcala: Good morning.

Speaker #4: Hey, a lot of good ground covered here. I just wonder, just coming back to PFT, Alex or Rich, just thinking about maybe chemical finally beginning to turn after kind of a tough slog here.

Jeff Sprague: Hey, a lot of good ground covered here. I just wonder if, just coming back to PFT, Alex or Rich, just thinking about maybe chemical finally beginning to turn after kind of a tough slog here. Just some color on kind of the margin ramifications of that, whether it's just kind of inherent mix in the business or the operating leverage that might come with that.

Speaker #4: Just some color on the margin ramifications of that, whether it's just kind of inherent mix in the business or the operating leverage that might come with that.

Speaker #2: Yeah, Jeff. So again, on chemical, I've been quite cautious to talk about improvement, but now we're starting to see something. Like I mentioned, in particular in the Americas, you can see some of the chemical companies reporting on increased volume, which is what we were waiting to see.

Alex Alcala: Yeah, Jeff. Again, on chemical, I've been quite cautious to talk about improvement, but now we're starting to see something, like I mentioned, in particular in the Americas. You can see some of the chemical companies reporting on increased volume, which is what we were waiting to see to start feeling better. Our orders are starting to show as well. The margins are above average for PFT, so it'll be accretive, and you'll see improved leverage on PFT versus what we normally talk about, the 30% and 35%. It'll be stronger as these markets recover. That's what I would say.

Speaker #2: At the start of feeling better, our orders are starting to show as well. The margins are above average for PFT, so it'll be accretive and you'll see improved leverage.

Speaker #2: On PFT versus what we normally talk about, the 30, 35 percent, it'll be stronger as these markets recover. That's what I would say.

Speaker #5: Great. And then maybe just on guidance—and Rich, I was maybe 10 minutes late, so perhaps you covered this. I did hear your comments about Aero aftermarket growing mid-single digits kind of going forward.

Jeff Sprague: Great. Then maybe just on guidance, Rich, I was on maybe 10 minutes late, so perhaps you covered this. I did hear your comments about aero aftermarket growing mid-single digit kind of going forward, did you formally change that in your guide? You had kind of proactively or preemptively haircut the guide last quarter on geopolitical risk. Is that now kind of reversed back to formally being in your guide that we're looking for up mid-single digit?

Speaker #5: But did you formally change that in your guide? You had kind of proactively or preemptively haircut the guide last quarter on geopolitical risk. Is that now kind of reversed back to formally being in your guide, that we're looking for up mid-single-digit?

Speaker #4: Yeah. So, Jeff, I would say that our run rate or approximate range of commercial aftermarket is in the $55 to $60 million range, is the way to think about it as we move through the balance of the year.

Rich Maue: Yeah. Jeff, I would say that our run rate or approximate range of commercial aftermarket is in the $55 to 60 million range, is the way to think about it as we move through the balance of the year. As we enter next year, we feel, to the point I made earlier, pretty good about a mid-single digit to upper mid-single digit growth profile for commercial aftermarket.

Richard Maue: Yeah. Jeff, I would say that our run rate or approximate range of commercial aftermarket is in the $55 to 60 million range, is the way to think about it as we move through the balance of the year. As we enter next year, we feel, to the point I made earlier, pretty good about a mid-single digit to upper mid-single digit growth profile for commercial aftermarket.

Speaker #4: And as we enter next year, we feel to the point I made earlier, pretty good about a mid-single-digit to upper mid-single-digit growth profile for commercial aftermarket.

Speaker #5: Great. And then just on the early build, I mean, it looks like you're managing any sort of margin friction there quite well across the business.

Jeff Sprague: Great. Just on the kind of OE build, I mean, it looks like you're managing any sort of margin friction there quite well across the business. Does that perhaps change as volumes move up?

Speaker #5: But does that, perhaps, change as volumes move up, even looking forward?

Rich Maue: Yeah

Richard Maue: Yeah

Jeff Sprague: Even perhaps looking forward?

Speaker #4: Yeah, so look, maybe what's different about Crane—and I think you appreciate this, Jeff—we make good margins on OE, whether that's military OE or commercial OE. And that arbitrage between aftermarket and commercial isn't as significant for us as it is for others, which is, I think, a really good benefit for our investors, frankly, right?

Rich Maue: Yeah. Look, maybe what's different about Crane, I think you appreciate this, Jeff. We make good margins on OE, whether that's military OE, commercial OE, and that arbitrage between aftermarket and commercial isn't as significant for us as for others, which is, I think, a really good benefit for our investors, frankly, right? The diversified nature of the portfolio, we're sort of agnostic as to whether or not OE is up or aftermarket is up and so forth. When you look at our 7% to 9% guide and our 35% to 40% leverage, we're going to be in that or better, frankly, but in that range no matter what. I think that's the way we think about it. To your point, we're seeing excellent OE growth here, and we're loving that.

Richard Maue: Yeah. Look, maybe what's different about Crane, I think you appreciate this, Jeff. We make good margins on OE, whether that's military OE, commercial OE, and that arbitrage between aftermarket and commercial isn't as significant for us as for others, which is, I think, a really good benefit for our investors, frankly, right? The diversified nature of the portfolio, we're sort of agnostic as to whether or not OE is up or aftermarket is up and so forth. When you look at our 7% to 9% guide and our 35% to 40% leverage, we're going to be in that or better, frankly, but in that range no matter what. I think that's the way we think about it. To your point, we're seeing excellent OE growth here, and we're loving that.

Speaker #4: The diversified nature of the portfolio—we're sort of agnostic as to whether OE is up or aftermarket is up, and so forth.

Speaker #4: So when you look at our 7% to 9% guide, and our 35% to 40% leverage, we're going to be in that or better, frankly, but in that range no matter what.

Speaker #4: And so I think that's the way we think about it. So we're to your point, we're seeing excellent OE growth here, and we're loving that.

Alex Alcala: You can see the margins.

Speaker #4: And you see the margins reading through. Yeah, I think we might have had a record performance in the segment this quarter. So, yeah.

Rich Maue: You see the margins reading through. Yeah. I think we might have had a record performance in the segment this quarter, so.

Richard Maue: You see the margins reading through. Yeah. I think we might have had a record performance in the segment this quarter, so.

Jeff Sprague: Yeah. We did know that, and I'm glad to hear you reiterate the point. Thank you very much.

Speaker #5: We did know that, and I'm glad to hear you reiterate the point. Thank you very much.

Speaker #4: Thanks, Jeff.

Rich Maue: Thanks, Jeff.

Richard Maue: Thanks, Jeff.

Speaker #5: Yeah.

Jeff Sprague: Yeah.

Speaker #1: Thank you. We'll take our next question, a follow-up from Scott Deuschel with Deutsche Bank. Please go ahead, your line is open.

Operator: Thank you. We'll take our next question, follow-up from Scott Deuschle with Deutsche Bank. Please go ahead. Your line is open.

Speaker #5: Hey, sorry for the ignorant question, but is the recovery in the US chemical market connected at all with the closure of the Strait of Hormuz, or is it reflecting a fundamental improvement in the market?

Scott Deuschle: Hey. Sorry for the ignorant question, is the recovery in the US chemical market connected at all with the closure of the Strait of Hormuz, or is it reflecting a fundamental improvement in the market?

Speaker #2: I would say it's demand-based. So, when we talk about our impact or investments in the Gulf, customers can invest even when there's no demand for increased chemical in the Gulf, because of the advantage of these stocks.

Alex Alcala: I would say it's demand-based. When we talk about our impact or investments in the Gulf, customers can invest even when there's no demand for increased chemical in the Gulf because of the advantage of destock. That's one driver. In this case, there's a volume demand increase that the US is seeing. I think the US consumer in particular has been resilient, and you can see some of these chemical companies starting to see that benefit. I think I would call it independent of that, Scott.

Speaker #2: So that's one driver. But in this case, there's a volume demand increase that the US is seeing. I think the US consumer in particular has been resilient.

Speaker #2: And you can see some of these chemical companies starting to see that benefit, so I think I would call it independent of that.

Speaker #5: Thank you.

Scott Deuschle: Thank you.

Speaker #1: And this concludes the Q&A portion of today's call. I would now like to turn the floor over to Alejandro Alcala for closing remarks.

Operator: This concludes the Q&A portion of today's call. I would now like to turn the floor over to Alex Alcala for closing remarks.

Speaker #2: Thank you for joining us today and for your thoughtful questions. As you've heard throughout the call, Crane delivered an outstanding second quarter, marked by strong core growth, broad-based operational execution, record margins, and another quarter of record earnings.

Alex Alcala: Thank you for joining us today and for your thoughtful questions. As you heard throughout the call, Crane delivered an outstanding Q2 marked by strong core growth, broad-based operational execution, record margins, and another quarter of record earnings. These results demonstrate the strength of our portfolio, the resilience of our business model, and the disciplined execution of our global teams. We remain focused on what has consistently differentiated Crane: innovation, customer focus, and the relentless application of the Crane Business System to drive growth, productivity, and value creation. I'd like to thank our employees around the world for their commitment and outstanding execution, and thank our shareholders for their continued confidence and support. We are so excited about the opportunities ahead and remain well-positioned to deliver long-term value for our stakeholders. We appreciate your interest in Crane and look forward to updating you on our continued progress next quarter.

Speaker #2: These results demonstrate the strength of our portfolio, the resilience of our business model, and the disciplined execution of our global teams. We remain focused on what has consistently differentiated Crane: innovation, customer focus, and the relentless application of the Crane Business System to drive growth, productivity, and value creation.

Speaker #2: I'd like to thank our employees around the world for their commitment and outstanding execution. And thank our shareholders for their continued confidence and support.

Speaker #2: We are so excited about the opportunities ahead and remain well positioned to deliver long-term value for our stakeholders. We appreciate your interest in Crane and look forward to updating you on our continued progress next quarter.

Alex Alcala: We are so excited about the opportunities ahead and remain well-positioned to deliver long-term value for our stakeholders. We appreciate your interest in Crane and look forward to updating you on our continued progress next quarter.

Speaker #2: Thank you and have a great day.

Alex Alcala: Thank you and have a great day.

Speaker #1: Thank you. This concludes today's Crane Company second quarter 2026 earnings conference call. Please disconnect your line at this time, and have a wonderful day.

Operator: Thank you. This concludes today's Crane Company Q2 2026 earnings conference call. Please disconnect your line at this time and have a wonderful day.

Q2 2026 Crane Co Earnings Call

Request DemoDemo

Crane

Earnings