0000025445-26-000017
SEC filingCrane NXT reported a 17% revenue increase to $387.7M, but operating profit fell 40% due to acquisition costs, restructuring, and lower DTT volumes, highlighting near-term margin pressure from strategic investments.
Crane NXT reported first quarter 2026 net sales of $387.7 million, a 17.4% increase from $330.3 million in the prior year quarter. The growth was driven by the De La Rue acquisition adding $26.5 million (8.0%), organic sales growth of $18.3 million (5.6%) primarily from the Currency business, and favorable foreign currency translation of $12.6 million (3.8%). However, gross profit rose only 11.1% to $155.9 million as cost of sales increased 21.9%, outpacing sales growth due to acquisition-related amortization, higher manufacturing expenses, and unfavorable mix. Gross margin contracted from 42.4% to 40.2%.
Operating income decreased 40.5% to $22.2 million. Selling, general and administrative expenses increased 26.9% to $130.6 million, including $10.3 million of acquisition-related costs and $10.7 million of stock-based compensation from the Antares Vision acquisition. Restructuring charges of $3.1 million added to the decline. Operating margin fell from 11.3% to 5.7%. Net income attributable to common shareholders halted 70.5% to $6.4 million ($0.11 per diluted share) versus $21.7 million ($0.38) last year, as interest expense rose 54.8% to $17.8 million due to higher debt levels.
Total assets increased 16.8% to $3.64 billion from $3.12 billion at year-end 2025, driven by the Antares Vision acquisition which added $241.1 million of goodwill and $251.2 million of intangible assets. Cash and cash equivalents declined slightly to $228.3 million from $233.8 million. Short-term borrowings rose to $249.5 million (from $135.1 million) including $123.5 million of assumed Antares Vision debt, while long-term debt increased to $1.26 billion (from $1.00 billion) due to the Term Loan B draw. Equity decreased modestly to $1.24 billion from $1.25 billion, as dividends and currency translation losses offset net income.
Cash used by operating activities improved to $14.0 million (from $19.1 million a year ago), primarily due to lower working capital requirements. Investing activities consumed $231.2 million, mostly for the Antares Vision acquisition ($225.4 million net of cash). Capital expenditures were $10.1 million (2.6% of sales). Financing activities provided $239.8 million, including $366.9 million from Term Loan B, partially offset by $112.4 million repayment of Term Loan A and $30.0 million net revolver activity. Free cash flow (operating cash flow less capex) was negative $24.1 million.
Management highlighted that sales benefited from the De La Rue acquisition and organic growth in the Currency business, but costs rose due to acquisition-related amortization, stock-based compensation, and higher manufacturing expenses. The acquisition of Antares Vision was completed on March 31, 2026, and is expected to provide growth in Life Sciences and Food & Beverage end markets. Restructuring programs continue to align cost structures. No forward guidance was provided. Key risks include tariffs, inflation, geopolitical conflict, and the ability to integrate acquisitions.
Segments: Crane NXT now operates two segments: Security and Authentication Technologies (SAT) and Detection and Traceability Technologies (DTT). SAT revenue surged 51.3% to $192.8 million, with operating profit rising to $15.1 million from $2.4 million, driven by the De La Rue acquisition and organic currency sales. DTT revenue fell 4.0% to $194.9 million, and operating profit declined 36.8% to $31.4 million, attributed to lower hardware volumes and $10.7 million of stock-based compensation from Antares Vision.
Acquisitions: The Antares Vision acquisition was completed on March 31, 2026, with total consideration of $418.2 million. The company recognized a $4.7 million remeasurement gain on its previously held equity interest. De La Rue Authentication Solutions was acquired on May 1, 2025, for £300 million (net $391.1 million after working capital adjustments).
Restructuring: $3.1 million of restructuring charges were recorded in Q1 2026, related to 2024 and 2025 programs. Cumulative charges for the 2025 program were $5.3 million; the 2024 program has been substantially completed.
Goodwill and Intangibles: Goodwill increased $241.1 million to $1.40 billion, primarily from Antares Vision. Intangible assets net increased $232.1 million to $789.3 million. Future amortization is expected to be $81.6 million for the remainder of 2026.
Stock-Based Compensation: $10.7 million of liability-classified stock-based compensation expense was recorded for Antares Vision Class B shares, with a corresponding liability of $36.7 million at quarter end. Additionally, a $6.8 million benefit from remeasurement of these awards was recognized within equity investment income.
Debt: The company drew down $366.9 million on Term Loan B to fund the Antares Vision acquisition and repaid $112.4 million of Term Loan A. Total debt (short and long-term) was $1.51 billion at March 31, 2026.