Crane Co (CR) 2018 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to Crane's Second Quarter 2018 Earnings Conference Call. (Operator Instructions) As a reminder, this call may be recorded. I would now like to introduce your host for today's conference, Mr. Jason Feldman, Director of Investor Relations. Sir, you may begin.

Thank you, operator, and good day, everyone. Welcome to our Second Quarter 2018 Earnings Release Conference Call. I'm Jason Feldman, Director of Investor Relations. On our call this morning, we have Max Mitchell, our President and Chief Executive Officer; and Rich Maue, our Chief Financial Officer. We will start off our call with a few prepared remarks, after which we will respond to questions. Just a reminder that the comments we make on this call may 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 the 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, Jason. After a solid start to 2018 in the first quarter, we have now delivered very solid results for the first half of 2018. In the second quarter, we reported EPS, excluding special items, of $1.41, up 20% compared to last year. Record sales of $851 million increased 21%, with an 18% benefit from acquisitions and a 2% benefit from core growth, along with favorable foreign exchange. We are confident in our full year core sales guidance of 2% to 4%, given our strong order growth and backlog position.

Operating profit, excluding special items, increased 13% from last year to $126 million. And operating margins, which now include the impact of Crane Currency, were solid at 14.8%.

Overall, most of our major end markets are performing well, with a few tracking better than we expected. That strength is reflected not just in our operating results this quarter but in the strong backlog and order growth across our 3 largest segments, giving us confidence in our outlook for the remainder of this year.

The current tariff and inflation situation is well understood, and we are effectively offsetting the impact. And we continue to position our business for the future with our various initiatives including repositioning, acquisition integration, growth investments and ongoing plans for future capital deployment. On balance, we have greater confidence in our 2018 outlook, and we are raising the midpoint of our full year adjusted EPS guidance by $0.15 to a range of $5.60 to $5.80. We are also raising our free cash flow guidance by $10 million to $250 million to $280 million. We were pleased with Fluid Handling's performance during the quarter. The recent strength in orders and backlog gives us confidence in the second half outlook as well as continued optimism about the longer term for this segment.

Payment & Merchandising Technologies performed as anticipated. And the recently acquired Crane Currency business outperformed our expectations in the quarter. Based on our year-to-date results, our current backlog and outlook, we are raising our full year accretion target for this business by $0.10 to a total of $0.40.

Aerospace & Electronics had a great quarter, and we now expect to beat our original full year guidance on both core growth and margins.

Looking ahead, we are very encouraged by our backlog, which rose 16% sequentially and 34% compared to last year, with the strength broad-based across our business lines.

Engineered Materials RV demand remain soft given a continued channel inventory correction. However, we continue to deliver very solid margins despite the weaker end markets and rising material costs, demonstrating the strength of our overall execution.

In summary, I'm very pleased with our operating results so far this year, and we are well positioned to deliver on our updated guidance for 2018.

Rich, let me turn it over to you for some additional financial commentary.

Thanks, Max. Good morning. I'll start with the segment comments, which compare the second quarter of 2018 to 2017, excluding special items as outlined in our press release and slide presentation.

In the second quarter, Fluid Handling sales of $277 million increased 5%, reflecting core sales growth of 2% and a 3% benefit from favorable foreign exchange. Fluid Handling operating profit increased 1% to $34 million with operating margins of 12.3%.

Given the strengthen in segment orders and backlog, which are a leading indicator primarily for our high leverage process valve business, and given the strong second half nuclear outage schedule, we expect both improving organic growth in margins in the second half of the year, bridging to our original guidance of 3% core growth and 13% adjusted operating margins.

After adjusting for foreign exchange, the backlog of $292 million increased 7% sequentially and it increased 12% compared to the second quarter of last year.

Orders also adjusted for foreign exchange improved 6% sequentially and 9% compared to the second quarter of last year. At this point, we believe that we'll be able to offset any incremental pressure from tariffs or commodity costs. Our Payment & Merchandising Technologies sales of $324 million increased 64% compared to the prior year, driven by 62% of growth coming from acquisitions with a 2% benefit from favorable foreign exchange and approximately flat core growth.

Remember that the first half of 2017 had very large shipments for a retail project, creating very challenging comparisons. Our core sales growth in the second quarter was consistent with our expectations, and we will see positive organic growth on easier comparisons in the second half of this year. Segment operating profit of $53 million increased 24%, with operating margins strong at 16.5%, but down from last year driven by the impact of the Crane Currency acquisition.

At Crane Currency, we are on track operationally and the integration is progressing well. During the quarter, we announced the closure of our printing operations in Sweden, which we will be transitioning to the new print facility in Malta. We have and will continue to invest in our design in paper manufacturing operations at the same location in Tumba, Sweden. Our core business is performing well, and as Max mentioned, we now expect approximately $0.40 of adjusted EPS accretion from Crane Currency.

Aerospace & Electronics sales increased 9% to $187 million. Segment operating margins improved to 23.3%, up 110 basis point from last year and ahead of our expectations. Total aftermarket sales increased 22%, with particularly strong sales of commercial and military spares, with modernization upgrade business approximately flat compared to last year.

Total OE sales increased 5% compared to last year and driven by stronger military sales as well as large commercial transportation and business jet sales.

Engineered Materials sales decreased 10% to $63 million, driven primarily by a decline in sales to the recreational vehicle market. Last quarter, we told you that we believed end retail demand for RVs or sell-through was solid at mid-single-digit year-over-year growth rates, but that RV dealers and manufacturers were rebalancing inventory production levels, which outpaced the strong retail demand. We thought that this channel inventory correction would be over by the end of the second quarter. It now looks like we will see weak RV production rates to the end of the year as channel inventory levels continue to adjust. However, retail sell-through data continues to support mid-single-digit growth for 2018.

Operating margins were just under 18%, even with the lower volumes, really solid execution by our team. And while resin prices have been rising, we have been offsetting effectively with productivity and price increases.

Turning now to more detail on our total company results and guidance. Our second quarter adjusted tax rate was 23.9%, as expected, and compared to 30.4% in the second quarter of 2017. The year-to-date adjusted tax rate was 21.6%, and we continue to expect a full year adjusted tax rate of approximately 22%.

First-half free cash flow was $87 million, approximately $38 million higher than the same period last year. Total debt at the end of the second quarter was approximately $1.1 billion, up from $743 million at the end of 2017, reflecting the acquisition of Crane Currency, but approximately $300 million lower than last quarter, reflecting debt paydown using repatriated cash.

As Max mentioned, we are raising our 2018 EPS guidance, excluding special items, by $0.15 to a range of $5.60 to $5.80 compared to prior guidance of $5.45 to $5.65. The increased guidance primarily reflects an incremental $0.10 of accretion at Crane Currency and a stronger outlook for Aerospace & Electronics partially offset by a softer Engineered Materials outlook. We also raised our free cash flow guidance by $10 million to a range of $250 million to $280 million.

Operator, we are now ready to take our first question.

(Operator Instructions) Our first question comes from Nathan Jones with Stifel.

I think I'm going to start off in Fluid Handling, and look to get a little more color from you around that backlog growth, order growth in the second quarter. I know you guys have said that the Fluid Handling business benefits from higher oil prices but would do so on a lag. Now saying oil above $60 for about 6 months, is this the kind of lag that you would expect to say -- and we should now expect to say those orders continue to strengthen based on higher oil prices?

Yes, I think, Nathan, our commentary in the past -- I'll start with that last part of your question regarding higher oil prices. We've essentially said that as it relates to RV or Engineered Materials in business in particular that the higher oil prices would have a negative impact on our margins given the petroleum-based raw material input cost we have in that business. But that -- while that might happen, we should see increased demand in Fluid Handling as a result of higher oil prices and then basically increased overall confidence in industrial spending. I think the order profile that we have over the last several quarters or few quarters has demonstrated that, that pickup has in fact happened. But I don't think it's as specific as there is a particular inflection point that suggests something directly tied to oil and gas. But just generally speaking that, that comment still holds. As we think about the balance of the year, and just speaking to the performance in the quarter, I would say that performance was as expected in terms of our sales and order profile. We're still on track for that 3% for the year as well as the 13% in margins. The strength in orders and backlog, for us, it's the leading indicator primarily for that higher leverage process valve business. And given the second half nuclear outage schedule, we do see that -- we do see a very good path to that organic growth rate that we expect in the -- by the end of the year.

So if I continue on that a little bit more, you're saying that as the high leverage process valve business, this is the leading indicator for a pickup on that. So that would then seem to suggest that we should be expecting incrementals to improve a bit as we get into the back of 2018 and going into 2019? I know you're going to get some higher incrementals out of the nuclear business, but just if we start looking at the process valve business specifically.

Yes, that's correct, Nathan.

And then you said that the order rates in the quarter there in Fluid Handling were kind of in line with your expectations. Could you share what your expectation is for those order rates after the back half?

We see continued momentum overall in the business. I won't give a specific number, but it feels like we're going to see a same pattern that we saw coming through the first quarter and second quarter, as we close out the year.

Yes, Nathan, this is Max. As it relates to Fluid Handling momentum, just a couple of comments. It's just -- since the bottom in '16, we've just seen a nice, steady, consistent increase in demand where we play, some of the factors that are driving our demand particularly in the niche chemical applications. And we're seeing some nice continued strength in the Americas from a chemical standpoint. We saw a little bit of an inflection point in our Europe order rates for 3 months in a row, not huge, but it's a trend that has been flat for quite some time. Not all of that order growth is specific to Europe but also for EPCs that are bidding global projects. So we -- again, signs of confidence in the second half and also moving forward. China, particular strength, kind of flat overall still, but for some particular movements in and out with chemical really strengthening and the project funnel increasing significantly. And we're seeing opportunities in China that is interesting in terms of developments. Where there's still some overcapacity on methanol and PBC and PET and core alkali, we're seeing an increase in opportunities for the specialty chemicals driven by domestic demand in automotive and construction around polycarbonates and polypropylenes, floor polymers, MDI. It's just -- more indicators of good, steady growth ahead for where we play. BASF just announced integrated petrochemical facility in south China, investing $10 billion aimed at automotive supply, and we're going to have content that we'll be bidding on for that project. So again, good steady momentum that we continue to see.

Our next question comes from Brett Linzey with Vertical Research.

Just wanted to come back to the order backlog. Posted really good growth across all the core pieces of the portfolio, but just specific to the payments business, did you receive any new or notable contract wins in the retail channel? Maybe just a little bit of color what you're seeing there? And then just a little bit more broadly on the other individual pieces in that business, maybe just the trends between payments and merchandising in the quarter in your outlook for the back half year.

So yes, Brett, this is Rich. So on the -- your comment with respect to payments and any unique orders in the retail space, there's nothing incremental, I would say, that in sort of big, large projects. I think we'll provide a little bit more color on that. But on the individual pieces, maybe I'll start there and give you some commentary overall and then a little bit of a -- and we'll take it from there. On gaming we've seen, I think, pretty good growth overall this year so far. Casinos continue to upgrade equipment. We're seen some benefits around legislation of sports betting in some U.S. jurisdictions and so forth. So we're feeling some pretty good momentum in gaming. Retail, we do continue to see growth across a number of different OEM channels there. Automation continuing to be the focus factor there. As you know, rising wages, low unemployment, not just traditional self-checkout but more use of attendant lane solutions that automate cash handling portions of the transaction. Financial services, also pretty good growth there with bank branch automation and our initiatives around growing that business. So overall we're feeling pretty good across the group, frankly. Merchandising, on the other side, was -- continued to be a little bit weak here in the second quarter, but what I would say is the outlook for the second half of the year we expect to improve just based on the customer profile that we have and the order rates that we expect to see read through. So feels good overall in terms of the underlying core business within payment.

Brett, this is Max. Also, from a -- your question specifically on retail. I'm very proud of what the team continues to drive in terms of organic growth opportunities that are beyond just the large customer project order. An example of that is our pay pod. And I would -- I can point you to, if you can just Google CPI pay pod, you can see some information on that in video and so forth. But this is an example of -- and we described some of this on Investor Day. But developing an OEM solution for attended self-checkout facing the customer and if you -- again, if you watch the video, you get a better sense. But the team took this product from ideation to first sale in 9 months. I'm just incredibly impressed with the solution, the effort here. We have a dedicated sales team of 7 people. We have a funnel already of $25 million. We have value-added resellers already signed up and really focused on Europe. So it's this kind of opportunity that we're really excited about. We internally -- we're targeting 3 to 500 units this year. And when I think about -- we've talked about this in the past, but in terms of the productivity drivers of that, retailers under pressures to become more efficient, reduce labor costs. When we think of point-of-sale locations and some publicly available data, if we kind of look at $140 million as a number out there on point-of-sale globally, and we back that down for various reasons to $70 million to $80 million served market focusing retail only with $40 million, maybe there's been 100,000 of installed solutions today. So you're talking about a 0.3% penetration so far, and it's a growing demand that we are well positioned to take advantage of. So again, feeling good about not only the existing momentum, the momentum in the second half, we're going to see order strengthening in the second half, but also some of the great work the team's doing to position ourselves longer term.

Okay, great, and I appreciate the detail there. And just on repositioning, it looks like you only spent $0.03 of the estimated $0.15 for the year. Are you seeing some projects a little bit slower to release? Or is this in line with your plan? And then any change in the expected payback timing if they move closer to the end of the year there?

Yes -- no, I think the $0.03 is -- I wouldn't read anything into that. It's timing, if anything. There's nothing on our schedule that's slipped. In fact, if anything, we're looking to accelerate as much as we can. So if anything, the opposite. But nothing to read into the spend side of that.

Our next question comes from Matt Summerville with D. A. Davidson.

You guys mentioned that you expect $0.40 of accretion this year from Crane Currency. Would it be possible for you guys to also give the top line expectation for the full year? And then in that same vein, is there anything we should be thinking about in terms of the second half cadence with the large project you guys have been working on to sort of delineate what we should see in 3Q versus 4Q? Any color you could give around that would be very helpful.

Yes, Matt. So we're not going to provide top line guidance on this. We have some unique customers here and would rather not do that for a variety of reasons. What I would say is that it's progressing according to plan. We feel really good about the business, both our core business, our large customer that we've talked about. In fact, we've even started to talk about opportunities with that customers and into 2019. So I can appreciate the question, but we'd rather not give that sort of color, frankly, for a variety of reasons, one of them being competitive.

But our current guidance does include our full expectations through the balance of this year, and we have good confidence with -- as the years progress and consistency in shipment payment relationship, or we feel confident in the balance of the year.

Got it. And then just with respect to Aerospace & Electronics, the 20%-plus growth you saw in aftermarket, was some of that timing related? Was there a big slug of initial provisioning in that? I guess, I'm curious as to why that number was quite as strong in Q2. And then I guess, how do we think about the back half of the year in Aerospace?

Yes. It was very solid, as you pointed out. A little bit of timing, for sure. They tend to be a little bit quicker, a little bit more difficult to predict, it's short cycle. So we do see some of that in the quarter here that perhaps benefited us from a timing perspective. But we have no indications of things on an overall basis slowing down. I don't -- I hesitate to say that we would expect the same growth rate next quarter. But the momentum that we've seen coming out of the first quarter and through the second quarter now, things feel very good from an aftermarket perspective and frankly more broadly across the rest of the business.

Our next question comes from Damian Karas with UBS.

Just a quick question -- follow-up question for you on Fluid Handling margins here. Sounds like one of the primary drivers in the second half is going to be some nuclear maintenance. Is it reasonable to assume that now that's pretty certain business from your guy's perspective once those outages are scheduled? And additionally, should we -- is it also a fair assumption that, that margin expansion that you're expecting would be more 4Q weighted, just given third quarter you're still sort of in the higher generation, hotter summer months?

The first answer is, yes. It's quite certain because these are planned and scheduled far in advance.

Right. And to answer your second question, no, I wouldn't say that it's more heavily weighted to the end of the year or fourth quarter. It's -- we would expect the margin profile to return or progressively get better as we move through. So I would expect similar margins in both quarters.

Okay, great, that's helpful. And you talked a little bit on the aerospace growth here, characterizing it as really broad-based. But could you maybe just elaborate a little bit more on any pocket of strength you're seeing across the business?

So order -- both orders and backlog, just to reiterate, was broad-based, as you mentioned. It's military, it's commercial, but both aftermarket OE. There's a decent portion of the backlog growth and order growth that we've seen that's multiyear. So we do expect to see a lot of this wind up benefiting us in future periods, of course. As you can tell from the sequential growth that we saw in year-over-year, it definitely makes us more confident as we think about not only the balance of this year but also next year. Defense has been an area that we've seen, also, when we say military, the defense profile of the opportunities that we have in the funnel increasing. But not unlike probably what you're seeing everywhere else on the commercial side or in defense. It's broad-based, and our solutions are such that we're seeing that pull-through that everybody -- that some others are seeing.

I would say, Damian, beyond what just the market -- whether it's some of the initial provisioning and some timing there or some replenishment spares there, it certainly feels like we're seeing a bit of potential catch up on some spare replenishment, both military as well as commercial. It's strong.

I would give a nod to our team and our technology because a piece of this, also, is what we've been saying in terms of the programs we've won and what we continue as we move forward. In terms of rate improvement, as -- in terms of using our programs that continue to ramp up. So we expect to see that. We're also seeing some nice wins by our team, kind of, across-the-board and continue, whether it's technology insertion with an incumbent that's struggling. Some share gain on modular power with competitors having some challenges. I just got back from the airshow and was very, very pleased at the customer feedback that I received. I think our teams are just doing a fantastic job delivering on new programs, working with our customers. That builds credibility and confidence, new opportunities. Our microwave team is continuing to identify a significant number of new opportunities. We have funded engineering that's increased a significant level in addition to our funded engineering internally. This is customer-funded engineering identifying new programs and opportunities that bode well for the long term, also. So I'm encouraged by the momentum that we see not just end market and where we're positioned but also what our teams are doing to drive that.

Our next question comes from Ken Herbert with Canaccord.

Max and Rich, I just wanted to first -- just one final question from me on the Aerospace & Electronics. As I think about the $0.05 or maybe more contribution to the full year guidance increase from that business, is it fair to say that the most of that, at least, is aftermarket related as you look at the full year? Or is part of that $0.05 or little bit greater than $0.05 you're seeing, sort of, relative to your expectations, significant changes in other part of that business as well?

Yes, good question, Ken. I think it's a little bit -- first of all, it's probably a little bit more than what you pointed out there in terms of $0.05 and not just aftermarket. So we're seeing momentum on the revenue side beyond aftermarket, and we leverage on the OEM side in Aerospace very well. So it's really a combination and we expect to see that continue.

Okay, that's helpful. And then on the guidance raise or the -- sort of the better outlook, it sounds like within the Crane Currency and the accretion, 2 questions around that. First, can you -- I know, obviously, you don't want to maybe provide too much color but would you -- is the accretion, is it maybe related to this faster ramp and implementation of Malta? Or are you maybe be getting a little better top line visibility? Can you just provide maybe a little bit more specifics on sort of where you're seeing the real sort of relative expectations, better performance?

Yes. So the overall increase was attributable. So going from $0.30 to $0.40 attributable to our larger customer. But we are seeing -- for the most part, there's a little bit of benefit elsewhere, but it's substantially that customer. Overall, feel really good about the underlying business and the order profile.

Okay, that's helpful. So fair to say, aside from that customer, no significant, sort of, movement one way or another in just the operation or the execution of the integration?

No, no. Integration is progressing as we planned, as we expected. We feel good about the transition. The -- as I mentioned in the prepared remarks, what we did in our high cost moving to low cost and oil moving along according to plan.

Okay, that's very helpful. And just one final question. Max, obviously, coming out of the airshow, there was a lot of discussion around timing of when Boeing may launch a new middle-of-the-market or NMA aircraft, and a number of suppliers were expressing significant reluctance maybe to participate in this program considering potential contract terms or concessions around participation on that program. Can you just talk about how you view that opportunity maybe and from your perspective is -- as you look at your return on investment required to participate in these programs, maybe just any of the puts and takes you're thinking about or maybe your view on participating on that program if and when it does move forward.

So NMA is clearly in our sights. Ken, we -- this has been strategic for us. So a little over -- not quite 2 years ago we have a strategy deployment process that continues to focus on innovation and strategic focus and NMA has been on that road map. So each of our solutions has very specific go-gets in terms of technology readiness. And so we have been working at developing a TRL 6 level of technology readiness that we will be ready to go to Boeing with, that we've already been communicating with, and look forward to partnering when and if that announcement comes out. So we're excited by it. We've been planning for it. We've been executing to it. We're getting our technology ready for it. And we think that the return will be there.

(Operator Instructions) Our next question comes from Kristine Liwag with Bank of America.

It's Kristine Liwag. Boeing expects to extract $150 million of cost synergies from its acquisition of Embraer's commercial aviation portfolio. When we talked to both companies, there seems to be an expectation that Embraer will be able to benefit from Boeing's buying power. Now when we look -- when I look at your Embraer E2 content, you've got significant share, you've got the fluid solutions business, the brake control systems, Power Solutions, and sensing solutions. Can you help us understand on a high level how we should think about your long-term pricing agreements with Embraer and how much latitude Boeing would have in order to change it?

Well, first of all, kudos to you for the insight on the E2 content, and we're pleased and proud of that content. We view this as -- the Boeing announcement as a good thing. This is going to drive, we think, incremental volume that is favorable. And as we have had in the past, we will work with our customer and develop joint solutions of opportunities at cost reduction and opportunities to participate. We successfully completed Partnering for Success. We look forward to what we know is the expectation on behalf of this important customer. I'm proud of the way our team has and will continue to embrace the process and identify opportunities for cost saving. So specifically, how do I think about this contract and what it means? I don't have that level of specificity at this time, Kristine. It's an excellent question. But I don't think -- I would say I don't think we're intimidated by that at all and we look forward to the discussions.

That's great. That's helpful color. And maybe switching to commercial aftermarket. Can you discuss the effect, if any, of use and serviceable parts in your Aerospace & Electronics business? Because I guess at Farnborough last week we heard that these pieces, there really aren't many of them in aftermarket -- in the used market today, and we're seeing a little bit of a pickup from commercial aftermarket orders from other companies in the industry. So I'm trying to understand if this affected you? And also how much this could have affected your 22% growth in the quarter for aftermarket?

I think it, Kristine, would be on the margin. We've been hearing and hearing the same thing anecdotally and to be precise about it is difficult, as I think you know. But I think it's -- it would be on the margin. We haven't heard of anything significant in terms of how we've benefited from that in the quarter.

Our next question comes from Walter Liptak with Seaport Global.

Wanted to go back to the Fluid Handling business and ask about just where you're seeing with -- the discussion we had about some international markets with oil prices higher. And wondering about pricing and if the pricing environment is getting any better? We're hearing that some of the bidding is still fairly fierce out there. I wonder if were you able to get prices in the quarter and how you're thinking about pricing in the back half on bid jobs.

Well, project pricing is always at a point in time and I think it's always been -- everybody's always complaining, it's always fierce. So there's fierce. And another we have to take into consideration inflationary pressures. And we are and we're seeing that put in place and through distribution we're getting price through distribution. So I'd say our teams are effectively getting pricing.

And I wouldn't expect that to change as we think about the balance of the year as well.

Okay. Is anything changing on or getting better on the energy side? Except for pricing, it'll get easier there, I think.

No. So the one area that we have pointed to where pricing tends to be a little bit more challenging is U.S. power, and it's -- that's been an area that continues to be challenging. We have some, I would say, unrealistic competitive pricing tactics and we walked away. So I would expect that to continue as we move through the balance of the year and probably into '19 as well.

Okay, great. And then just thinking about the Engineered Material business and your comment on this inventory overhang lasting into the second half. Is this -- is the revenue that we saw this quarter, is that sort of the new normal for this business until production levels pick up perhaps in 2019? Or is this number going to move around a little bit?

Yes. I think that's a safe way of looking at it. We don't expect any kind of a return this year and again, we think that retail is still going to continue. This is just about rebalancing at this point, that's our view, in terms of the inventory that's out there. So I would concur with your comment in terms of the balance of the year and the expectations.

At this time I'm showing no further questions. I'd like to turn the call back over to Mr. Max Mitchell for closing remarks.

Thank you, operator. A solid execution by our teams in Q2. Investing and driving growth in differentiated technology solutions for our customers. Executing on productivity and repositioning and driving results. As many of you know, I have a practice of honoring and quoting a person who has passed away in the most recent quarter, which attempts to convey a theme in our current quarter, or how we think about Crane's future. As the late author Tom Wolfe said, "The problem with fiction, it has to be plausible. That's not true with nonfiction." This quote has nothing to do with our quarter or Crane. I just like to quote, especially, given our present global environment of late. Thank you all for your interest in Crane. Have a great day.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.