Crane Company (CR) Earnings Call Transcript & Summary

Good morning and thank you for attending virtually the UBS Global Industrials and Transportation Conference. I'm Damian Karas from the UBS electrical equipment and multi-industry team. And in this session, we'll be speaking with Crane. We're pleased to be joined by Rich Maue, Chief Financial Officer; and Jason Feldman, Vice President of Investor Relations. Thank you very much for taking the time out of your busy schedule to join us, Jason and Rich. For those listening who aren't familiar with the company, Crane is a $3.3 billion in revenues, 15% EBIT margin, $5 billion market cap, diversified manufacturer of highly-engineered industrial products, with a substantial presence in a number of focused niche end markets. Rich will begin with a brief presentation, and then we'll move to an interactive question-and-answer session. And with that, the floor is yours, Rich.

Good morning, and thank you, Damian. And thank all of you listening today for your interest in Crane, and I hope that everyone is healthy and safe in today's environment. I'll be referring to page numbers in the presentation materials that I believe are available to all of you. On Slide 2, I direct your attention to the forward-looking statements disclaimer and the related content in our 10-K and other SEC filings. So turning to Slide 3. Before I provide all of you with an overview of Crane and our outlook, I want to remind everybody of the rich history and heritage of Crane, which we take very seriously. That history and heritage started 165 years ago. And over that time, Crane has seen 6 pandemics, a civil war, a great depression and 2 world wars. And throughout that entire period, Crane has been guided by the vision and word of our founder, R.T. Crane, who wrote in 1855 that, I quote, "I am resolved to conduct my business in the strictest honesty and fairness, to avoid all deception and trickery, to deal fairly with both customers and competitors, to be liberal and just toward employees, and to put my whole mind upon the business." Moving to Slide 4. For those less familiar with us, we here show our 4 focused segments. Our longest-standing legacy segment is Fluid Handling that you can see on the left-hand side of the screen, where we provide a wide range of highly engineered valves and other fluid-related products globally, primarily for the chemical, nonresidential construction, general industrial and energy markets. Moving to the right at Payment & Merchandising. We are a major global player in the unattended payment space, automating cash and cashless transactions and providing banknote and anti-counterfeit security products. We also have a very strong position in our Aerospace & Electronics segment, with sophisticated solutions throughout the aircraft for commercial and defense applications. And lastly, Engineered Materials, with proprietary formulas and process technology, primarily for the recreational vehicle and building products end markets. While this is still a fairly diverse set of businesses, we have consistently simplified our portfolio over a period of many years, directionally moving towards a model with fewer, larger and more global platforms. Today, the business remaining that we have, have a set of common characteristics, which are described on Page 5. Resilient and durable. Across our portfolio, we have businesses with long-term positive demand outlooks, driven in part by their large and sticky installed base, most notably at Fluid Handling and at Payment & Merchandising; or with long-lived programs like we have at Aerospace & Electronics. Our businesses are also based on evolutionary and not revolutionary product cycles. That's where the strength of our brands play a critical role. Our customers are looking for consistency and reliability, often associated with the brand that invented the technology in question. We also supply products that are extremely important to our customers, products that are performance critical, where the cost of failure is extremely high, whether it's ensuring that an aircraft properly stops on the runway, catching counterfeit bills in a Vegas casino or providing a value that is the last resort to prevent a failure -- a valve, sorry, that is the last resort to prevent a failure involving hazardous chemicals. Customers buy our products when they need something that simply can't fail. These are also businesses with design-driven engineered products, where we have a differentiated product or technology-driven advantage. And you see this in our gross margins versus our competitors. We are also generally involved in light manufacturing, either discrete assembly or materials conversion with high asset returns. This model generally means that we have a more flexible manufacturing base, which is helpful in an environment like we are in today. We have moved to this model over a long period, getting out of businesses like cement and steel during the '80s and then out of foundries that we had in the 2000s. And overall, our businesses tend to have high and stable returns well above our cost of capital, with strong positions in our chosen niches. How we operate our assets is at least as important as what we own. The Crane Business System is a critical differentiator for us, driving long-term profitable growth, and our internal visual model regarding the Crane Business System is shown on Slide 6. The Crane Business System is maniacal about being fact-based and metric-driven. With talented associates that we have, developed to focus our heat on the most strategic priorities, while constantly seeking and driving out waste variation and overburden that is trying to drag us down in our processes and our associates. And doing this well leads to shareholder value creation. While the Crane Business System includes numerous tools that our associates use to drive business results, the underlying key tenets are disciplined cadence and execution. So moving to Page 7. We speak to a common management system and cadence at Crane that is similar across all businesses. Think of this as a high-level playbook for our leadership teams on how to organize and execute. Constant, continuous improvement mindset, we celebrate the success of today while immediately looking for ways to improve further. We have a passion for never-ending improvement and believe there is no such thing as an equilibrium or status quo. We are either driving improvement or we are backsliding. We operate with the highest integrity and commitment to quality. You have all heard me speak and Max speak about the R.T. Crane Resolution before, and it's still central to how we operate at Crane. We have empowered customer focus and aligned general managers. Alignment between strategy and structure is critical, and we keep our decision-makers as close to the customer as possible and with broad autonomy to make the decisions that most heavily impact our customers. Across all these areas at Crane, there is extreme accountability. This is not for everybody, a level of accountability that is only possible in an environment that is data-driven and continuous improvement-focused with trust, transparency and respect for one another. Given the unique challenges companies are facing related to COVID-19, the Crane Business System's structured approach to management is even more critical and a bigger differentiator today. Turning to Slide 8. I'd note that the Crane Business System isn't just focused on operations. Every function drives process improvement, focused on enhancing customer satisfaction and execution. Some of our best improvement has been within our engineering teams who are encouraged to take risk and move with speed while driving process execution towards engineered excellence and innovation. While we are, of course, strictly controlling costs in today's environment, we continue to invest in all of our key strategic growth initiatives across Crane. Moving to Slide 9. We show some of our more exciting Aerospace & Electronics development initiatives. We are continuing to expand our core competencies in aerospace capable wireless communication and electrification. Both are key enablers across both commercial and defense applications, and we have numerous active programs across both markets to align Crane's decades of experience in highly-robust components and systems into advanced applications. Particularly in Aerospace & Electronics, our technology road maps are looking out 10 to 15 years. Demand on the commercial side of the business has certainly taken a hit over the last few months from this pandemic that we're finding ourselves in, but we don't think the long-term technology trends have changed. On Slide 10, at our Payment & Merchandising Technologies business, we also have numerous development programs. On the payment side of our business, we have been commercializing our vision for fully-connected systems across our customer vertical markets for more than a decade, and today are a clear leader in particularly in the vending and casino gaming markets. On Slide 11, at Crane Currency, we have also substantially increased our addressable market for anti-counterfeit solutions by continually increasing the breadth of our security product portfolio. On Slide 12, we show some of our latest new products across our Fluid Handling business, where we continue to make substantial progress with commercialization. Again, while the current environment is certainly impacting demand, our continued focus on new product development allows us to emerge from this shutdown stronger than when we entered it and in a position, in our view, to gain share. Shifting gears to slide -- on Slide 13. Unlike many of our peers, we chose to give fairly detailed guidance on our first quarter earnings call. We think it is important for our investors and analysts to understand how we are thinking about our outlook because those views are driving our decision-making throughout this environment. As we discussed on our April 28 earnings call, we expect a full year core sales growth decline this year of 17% to 22%, with adjusted EPS of $3 to $4.25. That EPS forecast includes incremental gross cost savings of at least $100 million this year. On Slide 14, we show what we expect the second quarter to be the low point for adjusted EPS this year in a range of $0.40 to $0.50 per share, with core sales down 27% to 30%. Importantly, the bottom end of our full year EPS range assumes that the second quarter level of sales decline persists for the remainder of the year, so it assumes no improvement from the second quarter levels in the second half. In that scenario, we would expect sequential improvement in EPS in the third and fourth quarter but entirely related to the cost actions that we have taken. In this scenario, we also envision some incremental cost actions beyond those we are currently implementing. At the high end of the range, we expect a gradual improvement in underlying demand starting midyear, with the core sales decline for the second half in the mid- to high teens. Based on what we know today, we think our range is balanced, and that the range is wide enough that we think both the top and bottom ends are relatively unlikely outcomes. Slides 15, 16 and 17 show our expectations for decremental margins. To start, remember that our original guidance for 2020 had a low leverage -- had low leverage related to both unfavorable mix at Crane Currency, the impact of the 737 MAX production pause as well as the impacts of the 2 recent acquisitions that we closed at the end of the year and in the first month of the year of 2020. Compared to our original guidance for 2020, our revised guidance reflects total deleverage rates in the 30% to 35% range, inclusive of our expected cost actions. That will be an impressive performance, particularly considering the mix involved here. We expect our most profitable and one of our highest leverage businesses, commercial Aerospace & Electronics, to suffer the steepest sales decline for the next few quarters, with our commercial aftermarket business hit particularly hard. Slide 18 provides our liquidity position in historical context. We recently closed on a new $343 million term loan to further enhance our liquidity position and provide us with more financial flexibility in this time of uncertainty. As of April 16, we had approximately $811 million of liquidity, comprised of $549 million in cash and $262 million available under our revolving credit facility. As a reminder, we do not have any bond maturities before 2023. We believe that we have ample liquidity for the current environment, and we have no need or plans to draw on our revolving credit facility at this time. We expect that we will reduce leverage naturally over the course of 2020, leaving the year in a stronger financial position than we entered it. To conclude on Slide 19. While this is certainly a difficult and unprecedented period, our key messages are the same as they have been for many years. We have a diverse portfolio of strong and resilient businesses. We have a solid balance sheet and a strong track record of free cash generation. We have a deep and experienced management team that has dealt with downturns before. And while we will always focus on productivity and cost management, we will continue to invest for growth for the long term. So once again, thanks for your interest in Crane. I look forward to the remainder of the session.

Thanks, Rich. [Operator Instructions] While we take inventory of those incoming questions, maybe you could just comment on how things have progressed with the business since late April. And just wondering if you feel like you have any less uncertainty now than you did kind of closing the quarter.

Yes. Well, Damian, what I would say is that we generally try not to comment or don't comment on intra-quarter trends. But clearly, the market is changing rapidly and has been both before and after. We deliberately gave a wide guidance range to ensure that the bracket was sufficient enough to address the majority of scenarios that we might think are plausible. But what I would say is that, that bracketed range, we still feel very comfortable with.

Okay. And I guess you mentioned before that sort of the low end of that range essentially assumes that the April level of sales and orders basically hold for the rest of the year.

Right.

I mean with restrictions now easing in most places, I mean, this -- like it's $3, do you think it's still really a possibility? Or how should we think about that?

Yes, I would say, we felt -- well, we felt -- I think our comments on the call, and I alluded to them briefly here on my prepared remarks, that we do feel like the low end of that range is remote, right? We don't think that's going to happen. That said, who knows what time here brings in the next few months. We do see some nice progress with things opening up, but you never know, right? You might -- we might find ourselves in a situation where we have a reoccurrence or trends start to change, something that's outside of our control. So if that was to happen, do we -- is the entire industrial space continue at a level similar to Q2? I mean, it would be hard -- I'd be hard-pressed to see that happening. But the level of uncertainty, I think, is so significant still that the range that we have, I feel, is good enough. And we're not going to necessarily update it here on the call.

That makes sense. How about these big sort of the corporate actions that you guys have outlined, roughly $100 million of gross savings, potentially more. Could you maybe just kind of give us an update on where you are on that front?

Sure. So I made comments about the Crane Business System in my prepared remarks. I can't emphasize enough how critical having a business system is. Mature as it is at Crane, and while as mature as it is, we're getting better and better every month, every year. But having that cadence and discipline and rigor and accountability and metric-driven focus certainly is one that enables us, I would say, to respond to environments that have uncertainty. Certainly, it wasn't set up to respond to a pandemic necessarily, but it does give us, I think, a clear amount of, I don't know, a leg up versus others in this regard. And the cost actions that we have and that we put in place, we're well underway. When we started -- when we had the conference call back in April, we see at least $100 million this year. I would say that we were balanced in how we pursued that $100 million. We're executing to it exactly as we set forth. But we could have gone a lot deeper, I would say, and -- but we were very conscious and aware of what that would mean to strategic growth initiatives or investments that we feel are really important to ensure that we do, in fact, come out of this stronger. And that is our view. We don't -- as I said, we don't envision flat for the rest of the year in terms of demand levels with Q2. And so we are trying to position ourselves to come out stronger. About 40% of that $100 million is fairly fixed over the next few years. And when you make difficult decisions with headcount, they -- that's going to -- there's a big piece of that, that is not demand-driven, right? Or it's demand-driven, but it's not direct labor. It's not your variable component. It's more your fixed component that we try to address here, given what we think is not going to be a very fast recovery. And the remainder of that is -- the 60% remaining is discretionary spending that we hope does come back over the next few years as demand slowly does return. The one thing I'd point out, too, Damian, is that, that $40 million is an annualized -- it's fairly fixed, and the $40 million as annualized since most were started in April and May.

Right. That's helpful. So I guess the 30% to 35% decrementals that you're targeting, those cost actions give you confidence in that. How are you thinking about -- sort of when we get into a demand recovery and you're actually seeing positive growth perhaps next year, how are you thinking about what the incremental margin should be in a recovery scenario?

Yes. We've typically talked about -- you're right, like a 30% to 34% or 35% in terms of -- well, we certainly mentioned it in terms of the decrementals here in what we expect this year. We will obviously try to do better than that, and I would expect us to do better when you're coming out, in particular, because of the fixed nature of some of these costs that we took out. So the order of magnitude, I don't want to get into too much detail. And the reason for that is that our margins and incrementals or decrementals as they occur can be very mix-sensitive, and we don't have a heck of a lot of clarity regarding the timing of recovery of different parts of the business. If I think of -- or if you think of the Aerospace & Electronics business and our aftermarket there, the recovery there will be later, right, than OEM in our view. And so we'll be -- it will unfortunately -- the highest-returning incrementals will be later in the recovery than in other spots of the business. So -- but that said, again, with the fixed cost takeout that we've done across the entire business, we would expect to do better than that, call it, 35% that we presented in our guidance range at the midpoint.

Okay, great. I guess before we get into the weeds a little bit on some of the business segments, some kind of higher level portfolio-type questions coming in. One, are there any changes to the portfolio that you're considering at present? And I guess kind of back to the balance sheet and the liquidity that you were discussing, Rich. Given where the stock price is, how important is it for you guys to make sure you maintain an investment-grade credit rating?

Yes, sure. So we don't see any -- as a result of this pandemic, any changes to the portfolio. We -- look, our portfolio evaluation is constant. We talk about all different things, all the things that you'd expect us to talk about from a portfolio perspective. Some of the alternatives that we look at have a number of complex factors and facts and circumstances, and you got tax implications and other -- all the things that you'd expect. But from a demand point of view and an outlook point of view in response to COVID, we don't see anything that would cause us to change our view in response to that. Now with respect to the -- I'm not sure the -- on the question of leverage and how important it is to us, from a capital deployment perspective, it is very important that we maintain our investment-grade rating. We feel strongly in that. So no change in our capital deployment philosophy or approach. Internal investments are our #1 priority. They have the greatest return. We continue to look at M&A even in this environment. So maybe perhaps that was part of the question. While nothing really all that actionable right now, we will look for dislocations and opportunities, or are looking for them actively, to see whether or not something might become more actionable because of the environment that we're in. Companies perhaps that are struggling a little bit more and causing actionability to increase, for example. So we are looking. But I would say that the actionability is extremely low now, but we want to be well positioned when things start to improve to be able to use our balance sheet, which is still strong, as I mentioned in my prepared remarks. And -- but how -- again, liquidity is still a priority for all of us. And we're going to -- we're planning accordingly and being ready for when we come out.

That makes sense. One thing that we've seen other companies do that have asbestos environmental liabilities is they've made efforts to kind of offload those. Has that -- is that something that you've considered at Crane?

Yes. Again, we tend to -- we look at all alternatives with our Board, including the possibility of even reinsurance on asbestos. But when you look at all the different options that are out there from a return -- a shareholder return perspective, our best approach right now is to keep doing what we're doing in the tort system in how we approach the liability today. So we will continue to explore alternatives, but nothing, in that regard, different from what we've been doing over the last several years.

Got it. Okay. Maybe we could shift gears into PMT. A lot of questions there. And it's an area where you've invested pretty substantially in recent years through some M&A. Which areas within PMT, kind of looking at the landscape right now, do you expect that will come back sooner as the economy recovers? And where do you think there might be a more protracted recovery? Or maybe even some business that just doesn't come back?

Okay. Yes, sure. So maybe I'll peel that back a little bit by the different areas like you suggested or asked. So just within payment overall, as you know, we have a Crane Currency, right, which is not and has not been impacted by COVID. If anything, we've seen a little bit of impact on transportation and logistics, right, just in the environment overall. But from a demand point of view, it has not been impacted. If anything, perhaps it's been impacted in a modest positive way as -- in environments like this, you tend to see people hoarding cash. So -- but -- so setting that aside, and going into the rest of payment, we think that in terms of what would come back sooner, retail would likely rebound most quickly. It's our largest vertical in the space as well in an area that is -- has the most incremental, I would say, interest in limiting person-to-person interaction, while also, of course, improving productivity and cost out and reducing labor. We have a proven product with a great value proposition in this space. The retail customers that we serve are largely grocery stores, big box stores, home improvement centers and pharmacies. And they're all financially doing pretty well right now. The issue is on timing, is that these stores are dealing with new disinfecting and cleaning regimens, and they're trying to limit the number of people in their stores to enforce social distancing, et cetera. And they want our products, but they don't have the capacity right now to physically install them. So -- but once they do, if you think about the concept of it being all about productivity and taking cost out, now you're introducing hygiene. So from our point of view, while the near term still needs to play out, medium to long term, we just see the value proposition for the products in the space to be better. Moving to financial services. Also, I would say, Damian, will recover fairly quickly as our products there also serve to minimize the person-to-person interaction. And financial services companies will come through this pretty quickly, I think, with the need to service their -- the consumer. I would say, on the slower side of things, we have less clarity on the timing of gaming. When you think about -- I mean, you can read -- you read the papers, people are returning to casinos, but it's slower, right? It's a lot slower. We think that as it relates to our products, slot machines will be easier to manage from a hygiene perspective than table games, where you have a lot of people touching a lot of different things, right, whether it's cards, chips, whatever it might be. You had large clusters of people around tables. And I think you know how that -- if you just visualize that. So the return in that space will be a bit slower. And it's going to be all about how quickly people are comfortable returning, right, and traveling again and getting on a plane and getting to Vegas or wherever. I would also say that vending is probably going to take a little longer because of really where the primary locations are where our machines are placed, whether those are schools, universities, offices, manufacturing sites, many of which today remain closed. And if there's a permanent reduction in office utilization, that could hurt this business a little bit more incrementally as well. But that said, there may also be a growing preference for vending, given that it's unattended. So there's sort of a bit of a push-pull on that one. But I would -- my view is that, that's probably going to take a little bit longer to come back than, like I said, retail or financial services. And then the last one on transportation, may also take a little bit longer given the slower recovery of public transit. So that's how I would position it. Again, currency not really impacted. And hopefully, that gives you some frame of reference for the remaining businesses in payment.

Really helpful. Makes total sense. You mentioned currency. Are you guys still confident you're going to see a return to normalcy when those -- the U.S. Fed bank note orders come out later this year? And when do you feel like you'd see or know that?

Yes. So we mentioned in the last few quarters, right, the Federal Reserve and the BEP started this year with some excess inventory. We talked a little bit about that production ramped down last summer. We think that the destocking has progressed basically as we expected, Damian. So we're on track here, maybe even a little bit faster than expected, which is good. So we think that everything is going to progress as we expect with the 2021 yearly currency order back to normal levels, somewhere north of that $6 billion notes for that year.

Okay, great. And one of your large competitors in the currency business has recently publicized this week some bank note awards that they've taken. Just wondering internationally if you're seeing any novel opportunities in the funnel.

Yes. I mean international has been growing significantly for us. We've been in high double -- well, in the teens, at least on growth year-over-year in that space. A less mature business for Crane on a relative basis to U.S. government, right? So -- but we've been making incredible progress here, wide range of opportunities. And yes, we're pursuing a number of things. Nothing has really changed. Funnel is strong, in particular for where we have opportunity to differentiate with micro-optic security. When competitors win, I think what you got to be cautious about, too, or what we watch carefully is the nature of the denomination or a bill or country that's won and whether or not there's technology and how much margin is available on a particular tender opportunity. So I wouldn't point to a specific notable opportunity, but I would say that -- and it's also, we haven't seen any impacts from the pandemic in the space internationally. And I would say we continue to expect that same kind of growth rate year-over-year as we look forward in 2020 here and finishing the year.

Got it. So sorry to jump around here, but a couple more questions kind of coming in on capital allocation. So maybe we can just revisit. If you wouldn't mind just giving -- kind of outlining what your philosophy is around the dividend?

Yes. So we've had a -- it's a very important part of our capital deployment priorities. We believe in a strong dividend returns to shareholders that we think is an important component. We're a little bit more opportunistic on share repurchase, try to offset dilution. But our primary means of returns to shareholders we like is the dividend. From our point of view, I think it shows our consistent, strong belief in the long-term growth of the company. It's very important to us that we maintain that. And the payout ratio, I think you all have seen. We're in the, I think, the 25% to 30% range. Today, it's probably a little bit north of that when you look at the current year, but that's okay, and we're all right with that. So yes, it still remains a very important part of our capital deployment philosophy and approach.

Great. Thanks for clarifying. Maybe we could just hop over to A&E now. Obviously, some pretty substantial near-term headwinds you're facing with the flight hours down and sort of the production on pause in some areas. But business is carrying some healthy backlog. How should investors think about the path forward for the commercial aerospace business?

That's a great question. I love this business. This is a phenomenal business that we have, right, components for critical applications, broad-based, broad applications. Commercial is your question, but defense as well. On the commercial side, from an OEM perspective, consistent with what you're hearing from other major corporate participants or industry participants. Our view is that it will probably take 3 to 4 years to return to normal. That's what our cost base contemplated. It -- we looked out 3 to 4 years to understand what do we really think here. This is an important element of how we size the business. And that's to get back to 2019 levels is the view. With the sharp reduction in aftermarket sales expected this year and limited shipments on the MAX, we see that commercial revenue overall will increase somewhat in 2021, but the pace and timing of that inflection point is, I would say, still pretty uncertain. I would just say that we think things are progressing as we expected and reiterate for the folks on the phone that we're not reliant on any one program. The MAX is an important program, but it's, in the scheme of things, with the breadth of what we offer on the platforms that we serve, they should take -- you should take comfort in the diversity that we have within A&E. So -- but that said, I think to answer your question, 3 to 4 years to get back to 2019 is most reasonable, with aftermarket coming in the latest.

Okay. So it sounds like apart from some of the cost actions, the headcount reductions that you're taking right now, I guess there's -- you're not really thinking about any other strategic changes kind of in terms of your product offering sales front that you're weighing in?

In A&E?

Yes.

In Aerospace & Electronics? Yes. No. No. If anything, we're continuing on our product technology road map. I mentioned earlier in my prepared remarks, we're still going full bore on electrification trends in that space. Wireless, these are solutions that are going to be there for the long term. We're really -- literally, we're investing today in things that are going to supply platforms that aren't going to get launched until 20 years from now. So it's important that we keep that differentiation going. And from that, you get a couple of wins here and there. But there's no decision with respect to getting out of something or anything like that. We feel really good about the products that we -- and solutions that we have across the entire portfolio. And again, not only in the commercial side, but defense as well.

Okay. That's helpful. I think we're running down to a couple of minutes here. We didn't get to talk about Fluid Handling yet. And so maybe just if you could give us an idea of how you think about the growth profile for that business over time. Is it some -- is it industrial production GDP, GFI? Maybe just how you think about that longer-term growth profile. And are you kind of focusing on increasing or decreasing your positioning around any of the end markets where you're playing?

Yes. So if I start with the last. Within Fluid Handling, think of it as 50% to 60% process valves, right, where highly corrosive, erosive materials that were we're controlling with valves and pipes and fittings. And then 40% to 50% in commercial, which is in nonresidential construction, mainly in Canada, U.K. and Middle East, a little bit in the U.S. On the process side, in terms of where we would invest or look to from an M&A point of view and, frankly, where a lot of our new product development is geared toward would be chemical. I would say that that's -- if I was to prioritize general industrial, refining, chemical and nuclear, which make up that process part of the business, chemical is where we are, I think, strongest and where we see the most opportunity, both from a growth and margin point of view. So that's maybe the answer -- excuse me, to the second part of your question. But on the first part in terms of growth profile and how we would think about it, I think you're -- you characterized that right, Damian, it's -- along with production, general production, general industrial production, GDP, and we hope to take a little bit more share. We've been pretty successful in new product development initiatives over the last several years, taking share in a market that's been more challenging. But we're hopeful to see -- we'll track with whatever that is. Plus, we like to outgrow whatever that market is at least 50 basis points so, if that makes sense.

Great. No, it does. Unfortunately, though, we're out of time. So I would like to thank you, Rich, and everyone listening on the line for joining us today. I hope you all have a great day.

Thank you very much, Damian, and to everybody that listened in and had questions for your interest in Crane. Thank you very much.