Financial Data and Key Metrics Changes - The company reported a sales growth of 5% year-over-year and an adjusted EPS of $0.54 for Q1 2025 [6][12] - Core sales declined by 4%, primarily due to lower volumes in the US currency business [6][12] - Adjusted segment operating profit margin was approximately 19%, impacted by lower volumes and unfavorable mix in US currency [12][14] Business Line Data and Key Metrics Changes - CPI's core sales declined by approximately 2%, driven by lower volumes in gaming and vending markets, while financial services and retail showed growth [14][15] - Security and authentication technologies saw a 22% increase in sales, including OPSEC, but core sales were down approximately 8% due to lower US currency volumes [15][16] - Crane Currency achieved a record high backlog with a book-to-bill ratio of 2.4, indicating strong demand for its anti-counterfeiting technology [6][11] Market Data and Key Metrics Changes - CPI ended the quarter with a backlog of $147 million and a book-to-bill ratio of approximately one [15] - The international currency business had a record high backlog of approximately $370 million, indicating strong performance and future sales confidence [16][73] - The company expects the impact of tariffs to be approximately $25 million on operating profit, with a significant portion related to CPI components sourced from China [18][19] Company Strategy and Development Direction - The company is focused on diversifying its portfolio through disciplined M&A, with the recent acquisition of De La Rue authentication solutions enhancing its security and authentication capabilities [7][10] - The new Crane authentication business aims to provide a unified set of products and services, leveraging synergies from the OPSEC and De La Rue integration [8][10] - The company is maintaining a robust M&A funnel and expects to execute additional transactions to expand its market-leading positions [12][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year adjusted EPS guidance despite economic uncertainties and tariff impacts [22][23] - The company is proactively addressing tariff impacts through pricing actions and supply chain strategies, expecting to mitigate the direct effects on 2025 results [19][20] - Management highlighted the resilience of the authentication business, particularly due to government contracts and recurring services [47][48] Other Important Information - The company reaffirmed its full-year adjusted EPS guidance range of $4 to $4.3 [22] - The integration of OPSEC and De La Rue is on track, with expectations for accelerated synergies in the second half of the year [91][92] - The company anticipates sales growth in the SAT segment to be between 19% to 21%, reflecting strong demand and the addition of De La Rue [20][21] Q&A Session Summary Question: Can you provide more granularity on CPI's growth rates across major end markets? - Management confirmed the expected impact of tariffs primarily affects the vending market, with a projected low single-digit decline for the full year [29][34] Question: How did the US currency perform relative to expectations in Q1? - Management indicated that the US currency performed as expected, with international currency showing better-than-expected growth [36][38] Question: What are the key priorities for integrating the De La Rue business? - Management emphasized focusing on customer acquisition and operational synergies to enhance the authentication segment [57][58] Question: What is the outlook for the authentication business in the next 18 months? - Management expects mid single-digit growth in the authentication market, with potential for steady expansion as brands adopt more services [86][88] Question: What is the status of OPSEC's synergies? - Management confirmed that OPSEC is performing as expected, with synergies expected to accelerate following the De La Rue acquisition [90][92]