CR - NYSE

Welcome to the Crane Company Fourth Quarter and Full Year 2024 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 Instructions] I would now like to turn the call over to Allison Poliniak, Vice President of Investor Relations.

Thank you, Shelby, and good day everyone. Welcome to our fourth quarter 2024 earnings release conference call. On our call this morning, we have Max Mitchell, our Chairman, President, and Chief Executive Officer; Alex Alcala, Executive Vice President and Chief Operating Officer; and Rich Maue, our Executive Vice President and Chief Financial Officer; along with Jason Feldman, Senior Vice President, Treasury, Tax and Investor Relations, who's also on for Q&A. We will start off our call with a few prepared remarks from Max, Alex, and Rich, after which we will respond to questions. And just a reminder, the comments we make on this call will include some forward-looking statements. We refer you to the cautionary language at the bottom of our earnings release and also in our annual report, 10-K, and subsequent filings pertaining to forward-looking statements. Also during the call, we will be using some non-GAAP numbers, which are reconciled to the comparable GAAP numbers in tables at the end of our press release and accompanying slide presentation, both of which are available on our website at www.craneco.com in the Investor Relations section. Now, let me turn the call over to Max.

Thank you, Allison. Thanks everyone for joining the call today. While a strong close in Q4 to another excellent year with results nicely outperforming our expectations. But before we dive into the results, I would like to touch on a few recent announcements. First, I want to acknowledge Alex Alcala, who was promoted to Chief Operating Officer back in December and who is joining us for the call this morning and moving forward. Many of you already know him from the 12 years he has been part of the team. But for those that do not, Alex has been an instrumental partner to me as we have strategically transformed Crane's portfolio into a higher growth, higher margin, and higher return business. Alex has demonstrated his strategic and operational capabilities in a number of roles at Crane. First, as President of our Pumps & Systems business, then as President of our Process Valve business, followed by roles as Senior Vice President for the Process Flow Technologies segment and as Executive Vice President, managing all of our post-separation segments and regional teams. His appointment as COO gives me further capacity to focus my attention on accelerating Crane's growth through strategy deployment and strategic acquisitions. Congratulations, Alex, and thank you for all you do in being Crane and driving results with the team.

Thank you, Max. Thanks for the kind comments. It's been really fun and I'm so proud of our team. I look forward to continued investor communications.

Also, a reminder that on January 2nd, we announced the completion of the divestiture of our Engineered Materials segment. This divestiture reflects yet another important step forward following the numerous actions we have taken over the last few years to simplify and strengthen our portfolio, focusing resources on our two strategic growth platforms, Aerospace & Electronics and Process Flow Technologies. With this divestiture now behind us, we are focused on driving accelerated inorganic growth through capital deployment with our very strong balance sheet, as well as accelerating organic profitable growth through our disciplined cadence and execution. Following that divestiture, the results we speak to today treat Engineered Materials as discontinued operations for all of 2024. Now on to the quarter. Adjusted EPS of $1.26 was driven by an impressive 8% core sales growth, reflecting strength across both Aerospace & Electronics and Process Flow Technologies. Core orders were also solid, up 8% in the quarter. We continue to drive outstanding results despite some unique and temporary challenges in the quarter we previously discussed, which included the impact of Hurricane Helene on our Marion, North Carolina facility. I'm extremely pleased to report that the site is recovering ahead of schedule and is getting close to normal full production rates. As I highlighted last quarter, a key tenant and strength of the Crane business system that we have proven time after time over the years is the flexibility and speed to react to issues outside our control. Our performance in 2024 is another great example of our consistently differentiated performance in the face of adversity. Full year adjusted EPS was $4.88, up 28% over 2023. Sales for 2024 increased 14%, driven by 8% core growth and 6% contribution from acquisitions. Adjusted operating profit of $383 million for the full year increased 29% compared to the prior year. Coming off record performance in 2024 and turning to 2025, I remain highly confident in the strength and resilience of Crane's team and portfolio. And that confidence is also reflected in the dividend increase announced last night of 12%. In addition, I feel confident in our initial 2025 adjusted EPS guidance of $5.30 to $5.60, solid 12% adjusted EPS growth at the midpoint. In setting our initial view for year, we assume that the macro backdrop remains largely unchanged with strong demand trends at Aerospace & Electronics and continued market outperformance of Process Flow Technologies, even as industrial demand signals remain mixed. Further, our balance sheet is well positioned to capitalize on M&A opportunities. And with continued progress on our existing M&A funnel, we expect additional opportunities to become actionable in 2025 across both Aerospace & Electronics and Process Flow Technologies. Our funnel is strong. There's a lot of activity. I personally visited two potential targets with the team this month alone, one in the Midwest, one in Europe. And indications are that quite a few assets, we've targeted for years will become actionable over the course of 2025. Before turning the call over to Alex, just a quick reminder that we will be hosting an Investor Meeting at our Aerospace & Electronics site in Fort Walton Beach, Florida on March 6, 2025. This location is the production site for our defense power business, which houses manufacturing of our wide range of power conversion products used in applications such as next-gen military radars. As an example, with growing capability in ultra-high power for emerging ground vehicles and other solutions. I look forward to seeing many of you there. Please reach out to Allison, if you need further information. Now, let me pass it over to our Chief Operating Officer, Mr. Alex Alcala, to highlight some of the key wins and successes in the quarter.

Thanks, Max, and thanks again for the kind introduction. It's been an honor to be on this journey with you and the team as we've continued to transform Crane and unlock value. Our teams are energized about our future and in many ways I feel we're just getting started. I look forward to seeing many of you in Fort Walton Beach in March, where we will go into a little bit more detail about this robust machine we have built at Crane to continue to drive sustainable, profitable growth. Let me move on now to make some comments on the quarter. Within Aerospace & Electronics, demand remains strong across all categories of our defense and commercial business. I'm proud to report, we received the first F-16 brake control upgrade order, further solidifying our confidence in a steep ramp-up for this program, starting at the very beginning of 2026. Total orders received for this project are now about $44 million, including some foreign military sales. As a reminder, this is a three-year break modernization program for the US Air Force fleet of F-16 fighter aircraft at about $30 million per year run rate. With total life of program of sales, $150 million to $200 million, including foreign military sales, most of which will follow the US portion of the program. We also made continued progress on vehicle electrification demonstrator programs, and we are continuing strong proposal activity on additional AESA radars. Also other significant negotiations continue for additional unmanned collaborative combat aircraft programs. Within Process Flow Technologies, we continue to outperform with our results better than we expected in 2024. For 2025, we see little change today in the demand environment, with North America remaining the greatest growth region for Crane. In the fourth quarter, Crane secured a sizable order for a large fertilizer project in the Middle East. Our valves provide superior abrasive resistance, and we have a preferred manufacturing location aligned with Saudi Vision 2030 that prioritizes localization, and this was a key enabler for this win. And in North America, we received sizable orders related to the expansion of a facility for a large chemical customer. Through the acquisitions of CryoWorks and Technifab, Crane has penetrated the high-growth market of space launch and semiconductor cryogenic equipment market, adding approximately $55 million of revenue and consolidating our position as a top provider of cryogenics vacuum jacketed pipe in the US, which we expect to expand further in 2025. Overall, another strong quarter for both Aerospace & Electronics and Process Flow Technologies, both in reported results as well as on our activity supporting current and future growth. And long term, as we reiterated during our 2024 Investor Day, we remain confident in a 4% to 6% long-term core sales growth rate from resilient and durable businesses with solid aftermarket and substantial operating leverage on top of already solid margins today that should lead to double-digit average annual core profit growth with potential upside from capital deployment. And with virtually no debt, the capital deployment opportunity is significant. Now let me turn the call over to our CFO, Mr. Rich Maue for more specifics on the quarter and some more details on our guidance.

Thank you, Alex. And my congratulations as well, and welcome to our quarterly calls. Hey, like John C. Reilly playing the part of Dale in timeless movie classic, Step Brothers, said to his step brother, Brennan, "Maybe someday we could become friends, friends who ride majestic, translucent steeds, shooting flaming arrows across the Bridge of Hemdale." Alex, as you well know, in addition to driving results and hunting for acquisitions, we like have fun here Crane, so you may want to think about what you will bring to the calls here moving forward.

Okay, Rich. That's a very low bar to get over. So let me think about it.

Let's get back to the call.

Okay. Good morning, everyone. Starting with total company results. We drove 8% core sales growth in the quarter with strength across both segments. Adjusted operating profit increased 38%, driven by strong volumes, solid net price and productivity, excellent operating leverage in the quarter. Leading indicators were also strong with core FX-neutral backlog up 9% compared to last year, driven by outsized strength at Aerospace & Electronics, and core orders were up 8% compared to last year as well. Another strong quarter reflecting our focus on accelerating core growth along with our consistently differentiated execution. For the full year, we generated $234 million of adjusted free cash flow from continuing operations and well above the $165 million generated a year ago. Recall, our October free cash flow guidance was for full year free cash flow to be at the lower end of our $255 million to $275 million range. That range included approximately $20 million that we expected from Engineered Materials. Excluding Engineered Materials, that range would have been $235 million to $255 million. So results were in line with our expectations. And in 2025, we are confident that we will deliver adjusted free cash flow conversion greater than 90% as the supply chain improves. Total debt at the end of 2024 was approximately $247 million, with $307 million of cash on hand, net proceeds of $208 million from the divestiture of the Engineered Materials segment were received after the close of the year. We continue to have substantial financial flexibility with approximately $1.5 billion of debt capacity today for M&A. As a reminder, we will deploy our capital with the same strict financial and strategic discipline that we always have employed, prioritizing internal investments for growth, followed by M&A and returns to shareholders. And as Max noted, our M&A pipeline remains very active, and we are excited about our acquisition opportunities in 2025. Now turning to our 2025 guidance. As we enter the year, we are initiating a full year view estimating adjusted EPS to be within a range of $5.30 to $5.60, reflecting 12% year-over-year growth at the midpoint. Guidance assumes total core growth of 4% to 6% and approximately 12% growth in adjusted operating profit at the midpoint. We also expect a 1% to 2% sales benefit from acquisitions and around one point headwind from foreign exchange. Overall, we anticipate another very strong year in 2025. Now for more details on the segments. Starting with Aerospace & Electronics. No material change in end market conditions relative to our expectations, still a very strong demand environment. On the commercial side of the business, aircraft retirements remained very low due to high demand and limitations on aircraft deliveries resulting from an aging fleet that requires more aftermarket parts and service. On the defense side, we continue to see solid procurement spending and a continued focus on reinforcing the broader defense industrial base given heightened global uncertainty today. And as Alex highlighted, we secured a substantial order for the F-16 brake control upgrade that have been highlighting on recent calls. That strong demand was also reflected in our fourth quarter growth rates with sales of $237 million, increasing 11% compared to last year with 7% core growth and a 5% benefit from the Vian acquisition. Even with the continued high level of sales growth, our record backlog of $864 million increased even further, up 23% year-over-year, including 16% core growth and a 7% contribution from the Vian acquisition. In the quarter, total aftermarket sales increased 21% with commercial aftermarket sales, up 15% and military aftermarket, up 36%. And OEM sales increased 7% in the quarter with 10% growth in commercial, and up 3% in military. Adjusted segment margin of 23.1% increased 290 basis points from 20.2% last year, primarily reflecting higher volumes, price net of inflation and productivity. On a full year basis, core sales growth of 13% exceeded our expectations for the year as well as our long-term targeted range of 7% to 9%. Adjusted operating profit of $217 million increased 36% over the prior year with adjusted operating margin expanding 310 basis points to 23.2%. Looking ahead to 2025, we anticipate core sales growth for the year to be up high single digits with that core growth leveraging at 35% to 40%. That guidance assumes continued strong sales, but with decelerating year-over-year growth rates as the comparisons become more challenging offset by the ramp in production at Boeing. While comparisons can create some noise on quarterly growth rates, as we have outlined previously, expect 2025's core sales growth rate to be followed by continued strong growth in 2026 and for the remainder of this decade, very confident for yet another outstanding year in 2025. At Process Flow Technologies, we remain well-positioned to continue outgrowing our markets. Our site in Marion, North Carolina is well on the path to be back to its full run rate by the end of the month. For the quarter, our results included an approximate $0.09 impact from production downtime in Q4 and the higher end of our expected $0.05 to $0.10 headwind. Overall, the financial impact from the hurricane will be fully offset by insurance recoveries. Demand trends remain consistent with 2024 with moderate improvement expected in the first half and with further strengthening in the second half. In the quarter itself, we delivered sales of $307 million, up 13%, driven by core sales growth of 9% in the quarter, along with a 4% benefit from the CryoWorks and the Technifab acquisitions. Compared to prior year, core FX-neutral backlog decreased 4% based on the timing of projects and core FX-neutral orders were up 3%. Adjusted operating margin of 20.3% expanded 330 basis points better than we expected, with strong core operating leverage in the quarter, driven by productivity, strong net price, and higher volumes. On a full year basis, core growth of 5% exceeded our expectations for the year and was at the high end of our long-term targeted range of 3% to 5%. Adjusted operating profit of $250 million increased 17% over the prior year, with adjusted operating margin expanding 100 basis points to 20.9%. For context, remember that in 2019, just before COVID margins were 13.6%, as we noted before, this is a significant step function change in margins, which is reflective of our efforts to structurally shift the business to higher growth in higher-margin end markets. We continue to see opportunity on this journey through contribution from accretive new product introductions, pricing that is both disciplined and appropriately assertive, our continued investments in technology-driven product differentiation, and continued productivity. Looking ahead to 2025, we anticipate core sales growth for the year to be up low to mid-single-digits with that growth leveraging above our normal targeted 30% to 35% given expected mix, strong productivity, and pricing benefits. Another fantastic year of performance at Crane in 2024 and strong confidence in in continuing to deliver 2025. Hey, we have a number of analysts with conflicting calls this morning, a very busy morning for earnings, so the questions may be a little light this morning. And at this point, we are ready to take our first question.

Thank you. The floor is now open for questions. [Operator Instructions] Thank you. We'll take our first question from Nathan Jones with Stifel. Your line is open.

Good morning Nathan.

Good morning everyone.

Good morning.

I don't know why anybody would choose another call when they get these results and the comedy show that goes along with it.

We appreciate it. Thanks Nathan.

I'll start off just with some questions on PFT. Strong growth, 8.5% in the fourth quarter, but you did burn off some backlog in the fourth quarter, which I don't think has been typical over the last few years. So, just if you could provide a little more color on the dynamics going on there.

Yes. Sure, Nathan, this is Alex. So, on the backlog, the way I think about it, our backlog grew in the first half really with some timing of project bookings, and then we're able to ship some of that that with excellent execution you see in our results. So, it did reduce a little bit in the second half. However, during the last three quarters, our orders have been sequentially pretty consistent. So the way I think about it is our backlog still finished at a really strong position. When you think about comparing it to 2019, we're up about 40%. So I think we're entering 2025 with a strong backlog and some expectations on some moderate improvements in demand, pretty confident to hit our guidance of low to mid single-digit growth PFT.

Thanks for that one. And maybe this is a bit of a longer-term question over the last few years. You commented -- I think it was Rich, in your comments about having moved the PFT portfolio to higher growth and higher-margin businesses, which has obviously been evident in the huge margin expansion you've seen over the last few years. Can you talk about how far you are through that process? When we might see something that approaches a bit more of an equilibrium level? I know you still intend to outgrow the market and expand margins. But at more of a steady pace rather than this what's been a huge margin expansion over the last few years.

Yes. This is Alex again. Thank you for that question. I think when you think about what we talked about in the investor conference, where we -- this has been a journey, a long journey when we have these, what we call these growth markets of chemical, pharma, wastewater and cryogenics, 2017, our mix of the portfolio was around that 30% mark. And now we're north of 60%. And we talked about in the mid-term, trying to reset 70% of our portfolio in these higher-growth markets. And that's not counting any improvements in the portfolio through acquisitions. We also talked about line of sight, mid-20s in operating profit. So we still think there's room to improve in the mid-term. And what's going to get us there is just continuing to execute our strategy, driving this machine that we call at Crane, which starts with strategy, feeding into innovation, driving commercial excellence, which includes value pricing, some of the simplification that is giving us pricing as well and all the way through operational excellence and building our team, which is really at the end key.

And then I guess just one more question. Max, you talked about the industrial economy putting out some mixed signals. Maybe you could unpack that a little bit on where the signals are good, where the signals are maybe not so good if you're expecting just any changes in the cadence of any of those markets, any of those geographies? Just any detail you can give us there? Thanks.

Thanks, Nathan. I will add a little bit and see if Alex has some additional color as well. We're exiting the year and some projects are just as expected a little lumpy or mix timing so forth. From a leading indicator standpoint, though, things continue to be fairly strong. And of course, it's early in a new administration. And so the guidance that we've set, which we have high, high confidence on in terms of the range and being able to deliver and execute on it, I think I'm probably a little bit more bullish than not, actually, just in terms of where we are overall. The US continues to be generally a little stronger. Europe, still stagnant. China, same. I don't know, Alex, if you'd offer a little bit more about the mix commentary by segment?

Yeah. So I think we're not really seeing any particular market or region getting worse. Over the last three quarters, things have been relatively stable. So if we follow the trends, that would imply some improvement as we go into 2025. So we expect to see that. I think as Max commented, in 2024, Americas, Middle East, APAC were growing, and Europe and China were deteriorating but stable, stabilized. So we expect to see a similar dynamic from a regional standpoint. I think in our vertical markets, cryogenics, which is our new business, continues to see strong demand. We expect chemical, we're seeing projects on upgrades, efficiency improvements, capacity expansions moving through the funnel, pharmaceutical as well. So I think a similar type of activity by markets and regions, but some improvement expected in 2025.

Thanks very much for taking my questions.

Thanks, Nathan.

Thank you. We'll take our next question from Matt Summerville with D.A. Davidson. Your line is open.

Good morning, guys.

Good morning, Matt.

Maybe, Max, you mentioned in your prepared remarks that you've recently been on site doing some diligence on a couple of potential deals. Can you maybe comment a little bit around the quality of the assets you're looking at the types of assets, the segments, the size? And then also maybe kind of compare and contrast what you've seen recently versus what you see coming available to the market over the course of the year? And then I have a couple of follow-ups.

Yeah. Generally, one in A&E, one in PFT, I would say, the value, enterprise value in the hundreds of millions dollars range to $100 million less. So that sweet spot we kind of see high-quality businesses without a doubt. I would almost say consistent with what we're seeing as we're moving forward. So generally pleased with the type of assets that we're looking at as well as those that we expect to come to fruition, some larger, a little larger but still in our targeted sweet spot that we expect to come to market as well. That's how I'd frame it up. Would you add anything different, Rich?

No, I think that's right. I think, fitting nicely with our strategy on the two in particular that we are looking at and as well for the ones coming up when you think about the targeted end markets that we're focused on, higher growth, the margin potential being there, cash flow accretion being there and so forth.

Got it. With respect to A&E and the high single-digit organic, you're sort of projecting this year, can you maybe help parse out a little bit, compare and contrast maybe what the assumptions are for commercial between OE and aftermarket and then similarly military between OE and aftermarket and ultimately, how you're thinking about the MAX restart and how you've kind of incorporated that into your commercial OE view?

So I'll give you the pieces, Matt, here in terms of how we're thinking about next year. For commercial OE, right now, we are at low double-digit is our current view. Military OE is mid-single-digit, commercial aftermarket mid- to high single digit. And military aftermarket, the same, mid- to high single digit. That's what we've included in our guidance range for you guys this morning.

I think in terms of the MAX start-up or continued recovery, we based our guidance on previously communicated ramp rates that I think are fairly achievable conservative. So we understand that Boeing signaling some accelerated potential there, which is great news. And if so, then we'll be prepared to benefit from that as well.

And then maybe last question, when you kind of pull together what you said in the prepared remarks and Q&A, Rich, can you maybe help a little bit with how we should be thinking about the overall quarterly earnings cadence as we move through the year in 2025 for Crane overall?

Sure. So I mean, on balance, it's roughly 50-50 first half, second half. The first quarter will be seasonally, I would say, the lowest, if that helps you, Matt. I think you should be able to square that off with your model.

And then how does -- yes. So I guess just one quick follow-up to that. The business interruption insurance recovery, how much in total do you expect on a per share basis? Is that fully baked in the guide? And where should we be kind of thinking about having that in numbers, so to speak?

We expect the recovery should be something similar to the income that was lost in the second half of last year. From a timing perspective, we would expect to receive that probably in the second quarter this year, potentially the third. And yes, it's included in that.

Okay. Perfect. Thank you. Appreciate it, guys.

Thanks, Matt.

Thank you.

Thank you. And we'll take our next question from Jordan Lyonnais with Bank of America. Your line is open.

Good morning, Jordan.

Good morning. For the margins for 2025, could you give us details on how you're thinking about mix of pricing versus volume and overhead absorption?

Yes. So look, our overall guide has got some -- it's a pretty healthy overall leverage rate, as you probably calculated north of, I think, on average, what we would expect given our algorithm that we've previously communicated. Look, the way to think about price in our guide, we're going to more than offset inflation as a baseline. I think that goes without saying. And then we're going to continue to do all the -- continue all the right work we have been with respect to value pricing and other initiatives in that regard as we move forward. In terms of absorption and the facilities, those volumes will come in and they will leverage at each respective businesses leverage rate, and that is baked into that 40%. I think it's a little bit north of 40% on the guide.

Okay. Got it. And then also to -- are you guys you guys concerned at all for any of the exposure have in China for PFT and those programs are ramping if the new administration does go through with aggressive tariffs and potential retaliation from the China side?

I have very little concern. I think our position in China, from our localization content is not so material. We understand the supply base. We've been very, very effective in managing inflationary measures. I think we're not going to overreact. I'm not that concerned. I'm not going to overreact. We're going to wait and see what happens. And I think we're well prepared to address whatever measures get put in place. That's how I'm thinking about it, Jordan.

Got it. Awesome. Thank you guys so much.

Thank you.

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

Good morning, Justin.

Thanks. Good morning, all. Just a quick housekeeping one to start. Is there any transaction related expenses we should be thinking about going forward or no, given the Jan 2nd closed on Engineered Materials?

No. Yeah. No, nothing. And if they were transaction expenses, they are usually treated as non-GAAP anyway, but nothing related to Engineered Materials.

Yeah, and I would say that obviously, most of the work was done prior to the end of the year since we closed in the early January. So we have a modest TSA arrangement in place, and it will be a very fast separation.

Okay. And then on the prior couple of earnings calls, you guys called out some work on the nuclear side in the valves. Just wondering if you're continuing to see good demand there? Or just wanted to get a sense if that's changed since the election?

It's less material for us overall, but it's still an important business. What's our percentage of total revenue, 7%. Just as a reminder to our investors, we have valve services, nuclear valve services we provide, new plant in construction, the AP1000, we've supplied valves, as well as turnaround work. When a nuclear power plant goes down for shutdown and gets refueled, there's regulatory requirements for going in and refurbing and inspecting the valves. We have a company that provides that service, a very, very good business. And certainly, the resurgence and reopening of nuclear plants has been favorable for us for this business. In addition, any time that you see the most recent announcement also that there's interest in restarting plants, we benefit as well on the plant start-up with helping to get it back up in order. So we're seeing that initiative. The team is working with next-gen small modular reactor providers to help get specified. This goes out many, many years, of course, from a long cycle standpoint. But to get specified into new plant construction from that standpoint as well, so less material for us, but a great little business and benefiting for sure with the nuclear resurgence overall.

All right. That’s very helpful. Thank you.

Thanks, Justin.

Thank you. [Operator Instructions] We'll take our next question from Tony Bancroft with Gabelli Funds. Your line is open.

Good morning team. Congratulations, Alex, on the promotion, very well deserved. I'm sure your first task, Max will have you heading out to the Catalina Wine Mixer to snap the necks and the cash checks.

Rich wanted to start a new company called Prestige Worldwide.

Boy, what a great, it would be wonderful wonders. So, now your $10 billion company, you've grown, you've had extreme performance over the last few years, you've done your portfolio cleaning. And I think you sort of look out and say this is -- what's next for this company. And is there any -- and I know you've talked about sort of the longer term of the Aero and PFT growing that that to the appropriate level. But do you have some competitors are has similar businesses to you. Is there any opportunity to do something larger or more transformational? Do you ever think about that? Does that sort of get into your conversations on sort of large-scale planning? Just any thoughts on that, Max.

Thanks for that, Tony. I really appreciate it. For sure. I mean, we go through a range of strategic planning on a regular basis that takes into consideration all permutations and scenarios. I don't -- we certainly don't want to say that it's something that we have clearly set our sights on. I don't want to, in any way, concern investors. Whatever we do is going to make sense. It's going to be right down the sweet spot. It's going to be something that we can clearly integrate and do well. But we've looked at some larger assets as well. And we continue -- we can even consider, not just cash, but does it ever make sense to use our equity as the currency also. Not something that we've got teed up in the immediate future, but things that we look at also. So, we were looking -- we will continue to look at all opportunities to continue to drive shareholder value, and some of those are larger opportunities that could be quite synergistic.

Thanks so much Max and team. Great job.

Thanks Tony.

Thank you.

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

Thank you, operator. Hey, again, yet another strong year with results outperforming expectations, even with surprises outside our control that our teams reacted to incredibly well. 2024 proved that our strategy is working, the team is executing, driving improved earnings through its growth and commercial excellence initiatives. Our M&A pipeline is full and we have the balance sheet capacity to execute. We're well-positioned for continued growth and delivering on expectations in 2025 and look forward to another hugely successful year. We look forward to seeing many of you on Wednesday evening and Thursday, March 5th and 6th, at our Investor Day, in Fort Walton Beach, Florida, where we will highlight the machine we have in place with our holistic Crane business system strategy, discipline, cadence, and execution. Like the late great Quincy Jones said, "Every day, my father told me the same thing. Once a task has just begun, never leave it until it's done. Be the labor great or small, do it well or not at all." Right, Alex?

Absolutely.

At Crane, we sweat the small details in our culture and business system because our team knows that this adds up to outsized results and performance and execution and driving profitable growth. Thank you all for your interest in Crane and your time and attention this morning. Have a great day.