CXT 10-K & 10-Q changes, risk factors and insider trading

Demand for our products is variable and subject to factors beyond our control, any of which could resultadversely in unanticipated events significantly impactingaffect our financial condition, results of operations.operations or cash flow.

A substantial portion of our sales is concentrated in industries that are subject to market conditions which may cause customer demand for our products to be volatile. Global trends in the use of cash as well as increased durability of banknotes could impact demand. Reductions in demand by these industries would reduce the sales and profitability of our business. Our CPI segment could be affected by sustained weakness in certain geographic markets or certain end markets such as gaming, retail or banking, as well as low employment levels, office occupancy rates and factors affecting vending operator profitability such as higher fuel, food and equipment financing costs; results could also be impacted by unforeseen advances in payment processing technologies. In addition, our results in the SAT segment are subject to significant variability due to the timing and size of contract awards by central banks for banknote production and actual order rates, particularly with the U.S. government. If any of these factors comes to fruition, it could adversely affect our financial condition, results of operation and/or cash flow.

•changesDevelopments in the U.S. government's approach toglobal trade policy, including inpossible somechanges casesto renegotiatingU.S. trade policies and terminatingtariffs certainand existing bilateral or multi-lateralretaliatory trade agreements.measures taken by other countries. While we continue to expect to be able to largely offset the impact of tariffs on operating profit with pricing and productivity initiatives, the broader economic implications resulting from market volatility may decrease customer demand and negatively impact revenue and profitability. The adoption and expansion of trade restrictions, the occurrence of a trade war, or other governmental action related to tariffs (including in Mexico where our facility operates under the Mexican Maquiladora program, which provides for reduced tariffs and eased import regulations) or trade agreements or policies has the potential tomay adversely impact demand for our products, our costs, our customers, our suppliers, and the U.S. economy, which in turn could have a material adverse effect on our business, financial condition, results of operations and cash flows. U.S. and foreign policy changes and uncertainty about such changes have resulted in increased market volatility and currency exchange rate fluctuations and may have a material adverse effect on our business, financial condition and results of operations.

We are dependent on information technology networks and systems, including the Internet, to process, transmit and store electronic information, and, in the normal course of our business, we collect and retain certain types of personally identifiable and other information pertaining to our customers, stockholders and employees. The legal, regulatory and contractual environment surrounding information security and privacy is constantly evolvingevolving. and companiesCompanies that collect and retain such information are under increasingincreasingly sophisticated and severe attack by cyber-criminals around the world. A theft, loss, fraudulent use or misuse of customer, vendor, employee or our proprietary data by cybercrime or otherwise, non-compliance with our contractual or other legal obligations regarding such data or a violation of our privacy and security policies with respect to such data could adversely impact our reputation and could result in costs, fines, litigation or regulatory action against us. Security breaches can create system disruptions and shutdowns that could result in disruptions to our operations. We cannot be certain that advances in criminal capabilities, including the use of artificial intelligence, new vulnerabilities or other developments will not compromise or breach the security solutions protecting our information technology, networks and systems. A successful cyber-attack on our information systems technology or those of our partners, vendors, or suppliers could adversely affect our ability to process orders, maintain proper levels of inventory, collect accounts receivable and pay expenses, all of which could have an adverse effect on our results of operations, financial condition and cash flows. Failure to effectively prevent, detect and recover from security breaches, including attacks on information technology and infrastructure by hackers, viruses, breaches due to employee error or actions, or other disruptions, could seriously harm our operations as well as the operations of our customers and suppliers. Such serious harm can involve, among other things, misuse of our assets, business disruptions, loss of data, unauthorized access to trade secrets and confidential business information, unauthorized access to personal information, legal claims or proceedings, reporting errors, processing inefficiencies, negative media attention, reputational harm, loss of sales, remediation and increased insurance costs, and interference with regulatory compliance. We have experienced and expect to continue to experience some of these types of cybersecurity threats and incidents,threats, which could be material in the future.

•Inability to achieve planned facility repositioning savings or related efficiencies from recent and ongoing investments; and

•Unidentified issues not discovered in the due diligence process, including legal contingencies.contingencies;

We compete with other industrial technology businesses for highly qualified employees in the countries in which we operate, and we may not be able to retain our personnel or hire and retain additional personnel needed for us to sustain and grow our business as planned.

Our business segments and corporate offices are dependent upon highly qualified personnel, including necessary technical expertise, and we generally are dependent upon the continued efforts of key management employees. Several factors may adversely affect the labor force available to us or increase labor costs, including high employment levels, federal unemployment subsidies, and other government regulations. We have recently observed an overall tightening and increasingly competitive labor market which has, and could continue to result in, higher compensation costs. While we believe we have a robust intellectual capital process, we may have difficulty retaining key personnel or locating and hiring additional qualified personnel. The loss of the services of any of such personnel or our failure to attract and retain other qualified and experienced personnel on acceptable terms could impair our ability to successfully sustain and grow our business,business and develop and introduce new products, which could haveadversely an adverse effect onaffect our results of operations and financial condition.

Our growth depends, in part, on continued sales of existing products, as well as the successful development and introduction of new products or technologies, which face the uncertainty of customer acceptance and reaction from competitors. Any delay in the development or launch of a new product could result in our not being the first to market, which could compromise our competitive position. The inability ofIf new products todo not meet targeted performance measures, or the discovery of a successful counterfeit of our security technology products,products is produced, we could causesuffer reputational harm and hurtdiminished future sales. Further, the development and introduction of new products may require us to make investments in specialized personnel and capital equipment, increase marketing efforts and reallocate resources away from other uses. We also may need to modify our systems and strategy considering new products that we develop. If we are unable to develop and introduce new products in a cost-effective manner or otherwise manage effectively the operations related to new products, our financial condition, results of operations and cash flows could be adversely impacted.

We are required to comply with various import and export control laws, which may affect our transactions with certain customers. In certain circumstances, export control and economic sanctions, and other trade-related regulations may prohibit the export of certain products, services and technologies,technologies. and inIn other circumstances we may be required to obtain an export license before exporting the controlled item. A failureFailure to comply with these requirements might result in suspension of these contracts and suspension or debarment from government contracting or subcontracting. WeFurther, we are subject to the Foreign Corrupt Practices Act, which prohibits U.S. companies and their intermediaries from making improper payments to foreign officials for the purpose of obtaining or retaining business or securing any improper advantage. We are also subject to the anti-bribery laws of other jurisdictions. FailureMoreover, we conduct business with central banks in countries with high corruption indexes. Due to complythe with anynature of theseour businesses, the countries in which we seek to sell products, and similarrobust regulationsregulatory couldregimes, resultwe inare at risk of incurring civil and criminal liability, monetary and non-monetary penalties, fines, disruptions to our business, limitations on our ability to export products and services, and damage to our reputation.

We rely on a combination of trade secrets, patents, trademarks, copyrights and confidentiality procedurespractices to protect our products and technology. Existing trade secret, patent, trademark and copyright laws offer only limited protection.protection Ourand in some cases for a limited duration. Further, our patents could be invalidated or circumvented. In addition, others may develop substantially equivalent, or superseding proprietary technology, or competitors may offer equivalent non-infringing products in competition with our products, thereby substantially reducing the value of our proprietary rights.rights and technology position in the market. The laws of some foreign countries in which our products are or may be manufactured or sold may not protect our products or intellectual property rights to the same extent as do the laws ofin the U.S. We cannot assure that the steps we take to protect our intellectual property will be adequate to prevent misappropriation of our technology. We could incur significant and/or unexpected costs in our efforts to avoid, manage, defend and litigate intellectual property matters. Our inability to protect our intellectual property could have an adverse effect on our financial condition, results of operations and cash flows.

•Defending these lawsuits and becoming involved in these investigations may divert our management’s attention and may cause us to incur significant expenses. In addition, we may be required to pay damage awards, penalties or settlements, or become subject to injunctions or other equitable remedies, that could cause reputational harm and have a material adverse effect on our business, financial condition, results of operations and cash flows.

•Our operations are subject to extensive environmental and health and safety laws and regulations, which impose limitations on the discharge of pollutants into the ground, air and water and establish standards for the generation, treatment, use, storage and disposal of solid and hazardous wastes. We must also comply with various health and safety regulations in the U.S. and abroad. The costs of compliance with these regulations results in ongoing costs that may increase over time. Failure to comply with any of these laws could result in civil and criminal liability, substantial monetary and non-monetary penalties and damage to our reputation. In addition, we cannot provide assurance that our costs related to remedial efforts or alleged environmental damage associated with past or current waste disposal practices or other hazardous materials handling practices will not exceed our estimates or adversely affect our financial condition, results of operations and cash flows.

We are committed to continuous productivity improvement, and we continue to evaluate opportunities to reduce costs, simplify or improve global processes, and increase the reliability of order fulfillment and satisfaction of customer needs. To operate more efficiently and control costs, from time to time we execute restructuring activities, which include workforce reductions and facility consolidations. For example, we recorded pre-tax restructuring charges in 20242025 and 2023.2024. While these are proactive actions are intended to increase our productivity and operating effectiveness, if demand for our products exceeds our available manufacturing capacity or we are unable to scale production quickly, we may experience delays in fulfilling orders, increased lead times, and potential loss of sales or customer relationships. Conversely, our inability to adequately and timely respond to potential declines in global demand for our products and services andto properly align our cost base could have an adverse effect on our financial condition, results of operations and cash flows.

While we are a principal competitor in most of our markets, all our markets are highly competitive. The competitors in many of our business segments can be expected in the future to improve technologies, reduce costs and develop and introduce new products. The ability of our business segments to achieve similar advances will be important to our competitive positions. Competitive pressures, including those discussed above, could cause one or more of our business segments to lose market share or could result in significant price erosion, either of which could have an adverse effect on our financial condition, results of operations and cash flows.

Additional tax expense or exposures could adversely affect our financial condition, results of operations and cash flows.

We are subject to income taxes in the U.S. and various international jurisdictions. Our financial condition, results of operations and cash flow could be adversely affected by changes to any or all the following: tax laws, regulations, accounting principles and judicial rulings, the geographic mix of our earnings, the valuation of our deferred tax assets and liabilities, and the results of audits and examinations of previously filed tax returns.

As of December 31, 2024,2025, we had goodwill and other intangible assets, net of accumulated amortization, of $1,375.9$1,721.2 million, which represented approximately 58%55% of our total assets. Our goodwill is subject to an impairment test on an annual basis and is also tested whenever events and circumstances indicate that goodwill may be impaired. Any excess goodwill resulting from the impairment test must be written off in the period of determination. Intangible assets (other than goodwill) are generally amortized over the useful life of such assets. In addition, from time to time, we may acquire or make an investment in a business that will require us to record goodwill based on the purchase price and the value of the acquired assets. We may subsequently experience unforeseen issues with such business that adversely affect the anticipated returns of the business or value of the intangible assets and trigger an evaluation of the recoverability of the recorded goodwill and intangible assets for such business. Future determinations of significant write-offs of goodwill or intangible assets as a result of an impairment test or any accelerated amortization of other intangible assets could have an adverse effect on our future financial condition and results of operations.

•We and Crane Company entered into certain agreements in connection with the separation transaction, including a separation and distribution agreement, a transition services agreement, a tax matters agreement, an intellectual property matters agreement and an employee matters agreement, which provide for certain obligations of each company for the benefit of the other for a period of time after the completion of the separation transaction. If Crane Company is unable, or otherwise fails, to satisfy its obligations under these agreements, including its indemnification obligations, we could incur operational difficulties or losses and experience an adverse impact on our financial condition, results of operations and cash flows.

•Because of their positions with us prior to the completion of the separation transaction, certain of our executive officers and directors have a financial interest in shares of Crane Company common stock. Continuing ownership of shares of Crane Company common stock and equity awards could create, or appear to createcreate, potential conflicts of interest if we and Crane Company pursue the same corporate opportunities or face decisions that could have different implications for Crane Company and us.

OpSecAntares Vision Acquisition

On May 1, 2025, we acquired De La Rue Authentication Solutions (“DLR”) for a base purchase price of £300 million. We utilized the Term Loan A to fund the acquisition. DLR is a leading global provider of digital and physical security and authentication technologies to governments and brands. De La Rue Authentication Solutions will be included within the Securitybrands, and Authenticationexpands Technologiesour segmentportfolio uponof close.authentication solutions.

We incurred transaction related expenses of $24.1 million, $19.9 million for the year ended December 31, 2024, and $22.0 million for the yearyears ended December 31, 2025, 2024 and 2023, respectively, recorded in “Selling, general and administrative” in the Consolidated and Combined Statements of Operations. These transaction related expenses primarily consist of professional service fees incurred in connection with acquisitions and the Separation. There were no allocated transaction-relatedThese expenses are predominantly recorded in connectionCorporate with the Separation for the year ended December 31, 2022.expense.

In response to challenging industry conditions and to realign the cost structure with existing economic conditions in the CPI segment, we recorded restructuring charges of $10.1$4.7 million, $0.5$10.1 million and $6.2$0.5 million for the years ended December 31, 2024,2025, 20232024 and 2022,2023, respectively. In addition, we recorded restructuring expenses of $12.1 million in the SAT segment during 2025, primarily associated with the integration of the DLR and OpSec businesses.

•salesSales benefit from the De La Rue and OpSec acquisitionacquisitions of $86.0$133.0 million, or 6.2%,8.9%,

•coreCore sales growth of $15.7$10.1 million, or 1.1%,0.7%, driven primarily by the Currency business, andpartially offset by lower volumes in CPI.

Cost of sales increased by $84.5$131.2 million, or 11.5%,16.0%, to $821.7$952.9 million in 2024.2025. The increase was driven primarily by the impact of theacquisitions OpSecin acquisitionSAT, ofhigher $66.1material million,and orother 9.0%,manufacturing costs, unfavorable mix and unfavorable mix,foreign currency translation, partially offset by productivity gains net of inflation and the impact of lower volumes in CPI.

Selling, general and administrative expenses increased by $19.4$54.1 million, or 5.3%,14.0%, to $386.2$440.3 million in 2024.2025. The increase was driven primarily by the impactSAT acquisitions of the OpSec acquisition of $29.7$45.3 million, or 8.1%,11.7% partiallyand offsetunfavorable byforeign costcurrency saving actions.transaction.

Operating profit decreased by $18.0$22.1 million, or 6.3%,8.2%, to $268.8$246.7 million in 2024.2025. The decrease was primarily driven by the CPI segment due to unfavorable mix, lower volumes and restructuring charges, partially offset by favorable pricing, lower material and other manufacturing costs, and cost saving actions. In the SAT segment, the decrease in operating profit was driven by the dilutive impact of the OpSec acquisition andacquisitions, higher material and other manufacturing costs, unfavorable mix and the impact of lower volumes in CPI, partially offset by favorable pricingpricing, incost thesaving Currencyactions business. Both segments achievedand productivity gains.

Sales decreased by $13.2$26.6 million, or 1.5%,3.0%, to $873.2$846.6 million in 2024,2025, driven by lower core sales of $6.9$31.7 million, or 0.8%,3.6%, andoffset unfavorableby favorable foreign currency translation of $6.3$5.1 million, or 0.7%.0.6%.

•Sales of Payment Acceptance and Dispensing Products decreased $18.8$30.5 million, or 2.5%,4.1%, to $739.9$709.4 million in 2024.2025. The decrease reflected lower core sales of $12.5$35.6 million, or 1.6%,4.8%, as favorable pricing was more than offset by lower volumes primarily in gaming.vending. Included in the salesThe decrease was unfavorablepartially offset by favorable foreign currency translation of $6.3$5.1 million, or 0.8%,0.7%, primarily reflecting the weakening of the Japanese Yen, partially offset by the strengthening of the British pound and Japanese yen against the U.S. dollar.

Cost of sales increaseddecreased by $1.0$8.1 million, or 0.2%,1.8%, to $440.4$432.3 million in 2024,2025, asdriven lower material and other manufacturing costs,by the impact of lower sales volumes and productivity gainsgains, were more thanpartially offset by unfavorable mix.mix, higher material and other manufacturing costs and unfavorable foreign currency translation.

Selling, general and administrative expense increaseddecreased by $0.2$11.7 million, or 0.1%,5.7%, to $204.4$192.7 million in 2024,2025, primarily due to higher restructuring charges, partially offset by the impact of cost saving actions,actions and favorablelower foreignrestructuring currency translation.charges.

Operating profit decreased by $14.4$6.8 million, or 5.9%,3.0%, to $228.4$221.6 million in 2024.2025. The decrease primarily reflected unfavorable mix of $36.3 million, or 15.0%, the impact of lower volumes of $14.4$27.8 million, or 5.9%,12.2%, higherand restructuringunfavorable chargesmix of $9.6$16.4 million, or 4.0%, and unfavorable foreign currency translation of $2.9 million, or 1.2%,7.2%, partially offset by favorable pricing, lowernet materialof and other manufacturing costs andinflation, productivity gains of $41.8 million, or 17.2%, and the impact of cost saving actions of $9.1$32.0 million, or 3.7%.14.0%, and lower restructuring charges of $5.4 million, or 2.4%.

Sales increased by $108.7$196.5 million, or 21.5%,32.0%, to $613.6$810.1 million in 2024,2025, primarily reflecting the sales benefit fromof the OpSec acquisitionacquisitions of $86.0$133.0 million, or 17.0%, and21.7%, higher core sales of $22.6$41.8 million, or 4.5%.6.8% and favorable foreign currency translation of $21.7 million, or 3.5%.

•Banknote and security product sales increased by $21.5$70.5 million, or 4.3%,13.5%, to $521.9$592.4 million in 2024,2025, driven by higher sales in international markets.markets and favorable foreign currency translation reflecting the strengthening of the Euro and Swedish Krona against the U.S. dollar.

•Authentication products and solutions sales increased by $87.2$126.0 million to $91.7$217.7 million in 2024,2025, driven by the sales benefit from the OpSec acquisition.acquisitions.

Cost of sales increased by $83.5$139.3 million, or 28.0%,36.5%, to $381.3$520.6 million in 2024,2025, primarily due to the impact of the OpSecSAT acquisitionacquisitions of $66.1$79.4M million, or 22.2%,20.8%, acquisition related amortization and fair value step-up, higher material and other manufacturing costs, the impact of higher volumes, and unfavorable mix,foreign currency translation, partially offset by productivity gains.

Selling, general and administrative expense increased by $30.6$70.7 million, or 33.7%,58.2%, to $121.4$192.1 million in 2024,2025, primarily due to the impact of acquisitions and restructuring charges associated with the integration of the De La Rue and OpSec acquisition of $29.7 million, or 32.7%.businesses.

Operating profit decreased by $5.4$13.5 million, or 4.6%,12.2%, to $110.9$97.4 million in 2024,2025, reflectingprimarily thedue dilutive impact of the OpSec acquisition of $10.2 million, or 8.7%,to higher material and other manufacturing costs net of favorable pricing of $8.4$31.2 million, or 7.2%,28.1%, andhigher unfavorablerestructuring mixcharges of $3.1$12.1 million, or 2.7%,10.9%, partially offset by productivity gains and cost saving actions of $17.9$26.7 million, or 15.4%.24.0%. The dilutive impact of acquisitions of $15.0 million, or 13.5%, was offset by the impact of higher volumes.

Corporate expenseexpenses decreasedincreased by $1.8 million, or 2.5%,2.6%, in 20242025 compared with 2023,2024, primarily related to lowerhigher transactioncompensation relatedand expenses.benefit costs.

Related party interestInterest expense decreasedincreased by $2.5$12.5 million, or 100%,26.2%, in 20242025 compared with 20232024 asdue relatedto partyhigher interestdebt expense was only incurredoutstanding in the period prior2025 to thefund Separation.acquisitions.

Our 20242025 effective tax rate of 18.7%19.8% is lowerhigher than the prior year’s comparable period due to the mix in jurisdictional earnings and release of uncertain tax positions due to the expiration of statute of limitations.earnings.

The Organization for Economic Co-operation and Development (“OECD”) has proposed a global minimum tax of 15% of reported profits (“Pillar 2 tax”) that has been agreed upon by over 140 member jurisdictions including the United States. Pillar 2 addresses the risks associated with profit shifting to entities in low tax jurisdictions. The impactPillar of2 tax liability for the adoptionCompany ofin 2025 was approximately $1.3 million. On January 5, 2026, the US Treasury Department and OECD have agreed in principle to adopt a side-by-side tax system that will exempt US parented companies from Pillar 2 taxes starting in 2024 was approximately $2.8 million.2026.

Our operating philosophy is to deploy cash provided from operating activities, when appropriate, to provide value to stockholders by reinvesting in existing businesses, by making acquisitions that will strengthen and complement our portfolio; by divesting businesses that are no longer strategic or aligned with our portfolio and where such divestitures can generate capacity for strategic investments and initiatives that further optimize our portfolio; by paying dividends and repaying prepayable debt. At any given time, and from time to time, we may be evaluating one or more of these opportunities, although we cannot assure you if or when we will consummate any such transactions.opportunities.

We had net proceeds of $210$126.0 million from the Revolving Facility as of December 31, 2024.2025. As of December 31, 2024,2025, we repaiddrew indown full$532 million on term loans to fund the outstandingDe $105.0La millionRue debtand onAntares theacquisitions, Termand Facility.repaid $40.9 million. Please see Item 8 under Note 14, “Financing” in the Consolidated and Combined Financial Statements for additional details.

Cash provided by operating activities was $241.5 million in 2025, compared with $214.1 million in 2024, compared with $276.3 million in 2023.2024. The decreaseincrease in cash provided by operating activities was primarily driven by the timing of shipments which impactedimproved working capital.capital management.

Cash used for investing activities primarily consists of cash used for capital expenditures and acquisitions. Capital expenditures are made primarily for increasing capacity, replacing equipment, supporting new product development, and improving information systems. We expect capital expenditures of approximately $30$75 million to $80 million in 2025.2026.

Cash provided by (used for) financing activities consists primarily of dividend payments to shareholders, repayments of indebtedness, and proceeds from our credit facilities.facilities and investments from our stakeholders.

•$198.7$198.8 million of 6.55% notes due 2036; and

•$346.8$346.9 million of 4.20% notes due 2048.2048; and

Under various agreements, we are obligated to make future cash payments in fixed amounts. These include payments under our short-term and long-term debt agreements and rent payments required under operating lease agreements. The following table summarizes our fixed cash obligations as of December 31, 20242025:

Crane NXTOn acquiredMarch a31, controlling2026, interestthe inCompany completed its multi-phase acquisition of Antares Vision S.p.A. (“Antares Vision”) through a multi‑phase acquisition which was completed on March 31, 2026,, resulting in 100% ownership. Antares Vision is aincluded globalwith providerCrane ofPayment Innovations within the Detection and Traceability Technologies segment and enhances the Company's inspection, detection,detection and track‑and‑tracetrack-and-trace solutionscapabilities serving life sciences and food and beverage end markets.customers.

In the threesix months ended MarchJune 31,30, 2026, we drew down $30.0 million and repaid $30.0 million on our Revolving Facility to fund working capital requirements. We borrowed €317.9 million, or $366.9 million, under the Term Loan B to fund the acquisition of Antares Vision and assumed $123.5 million of Antares Vision debt, $115.1 million of which iswas expectedsubsequently to be paidrepaid in the second quarter of 2026. We borrowed $159.4 million and repaid $101.0 million on our Revolving Facility to fund the settlement of Antares Vision debt and working capital requirements. In addition, we repaid $112.4 million of Term Loan A.

Results from Operations – Three Month Periods Ended MarchJune 31,30,

The following information should be read in conjunction with our Unaudited Condensed Consolidated financial statements and related notes. All comparisons below refer to the firstsecond quarter 2026 versus the firstsecond quarter 2025, unless otherwise specified.

•the sales benefit from the Antares Vision and De La Rue acquisitionacquisitions of $26.5$74.6 million, or 8.0%,18.4%,

•organic sales growth of $18.3$11.3 million, or 5.6%,2.8%, driven primarily by the Currency business, and

Cost of sales increased by $41.7$49.0 million, or 21.9%,20.8%, to $231.8$284.6 million in 2026. The increase was driven by the impact of the Antares Vision and De La Rue acquisitionacquisitions of $18.9$34.8 million, or 9.9%,14.8%, acquisition related amortization, higher manufacturing expenses, unfavorable foreign currency translation and unfavorable mix, partially offset by productivity gains.

Selling, general and administrative expenses increased by $27.7$22.7 million, or 26.9%,20.0%, to $130.6$136.3 million in 2026. The increase was driven by the impact of the De La Rue acquisition, stock-based compensation expense from the Antares Vision acquisition and higher transaction related expenses,acquisitions, partially offset by lower transaction related expenses and the impact of cost saving actions.

Our effective tax rate for the three months ended MarchJune 31,30, 2026 was higher than the prior year’s comparable period primarily due to the lower excess stock compensation deduction in the U.S. asmix of Marchnon-U.S. 31, 2026.earnings.

Segment Results of Operations - Three Month Periods Ended MarchJune 31,30,

•Banknote and security product sales increased by $47.0$22.0 million, or 50.3%,15.3%, to $140.4$165.5 million in 2026. The increase was driven by organic sales growth of $37.0$18.7 million, or 39.6%,13.0%, reflecting higher salesvolumes in both U.S. andfrom international markets. Favorable foreign currency translation of $10.0$3.3 million, or 10.7%,2.3%, reflects the strengthening of the Swedish krona and euro against the U.S. dollar.

•Authentication products and solutions sales increased toby $52.4$11.7 millionmillion, or 23.6% in 2026, mainly driven by the sales benefit from the De La Rue acquisition.

Cost of sales increased by $42.8$18.0 million, or 49.6%,14.5%, to $129.1$141.9 million in 2026, due to the impact of the De La Rue acquisition of $18.9$7.7 million, or 21.9%,6.2%, acquisition related amortization, higherunfavorable manufacturingmix expenses,and the impact of higher volumes in the Currency business, and unfavorable foreign currency translation.translation, partially offset by productivity gains.

Selling, general and administrative expense increasedwas byflat $7.7compared million,with orthe 19.9%,prior toyear $46.4period, millionas incost 2026,savings dueactions tooffset the impact of the De La Rue acquisition.

Sales decreasedincreased by $8.0$55.1 million, or 4.0%,26.1%, to $194.9$266.5 million in 2026, driven by sales benefit from the Antares Vision acquisition of $63.7 million, or 30.1%, partially offset by lower organic sales of $10.3$7.2 million, or 5.1%,3.4% offsetand by favorableunfavorable foreign currency translation of $2.3$1.4 million, or 1.1%.0.6%.

•Sales of Detection and Inspection products and solutions decreasedincreased by $9.8$38.2 million, or 5.8%,21.6%, to $160.1$215.3 million in 2026. The decreaseincrease was driven by sales benefit from the Antares Vision acquisition of $48.4 million, 27.3%, partially offset by organic sales decline of $12.0$8.8 million, or 7.1%,5.0%, due to lower volumes in hardware volumes.and Thevending, salesand decrease was partially offset by favorableunfavorable foreign currency translation of $2.2$1.4 million, or 1.3%,0.7%, reflecting the strengthening of the British pound and Australian dollar against the U.S. dollar, partially offset by the weakening of the Japanese yen against the U.S. dollar, partially offset by strengthening of the Australian dollar against the U.S. dollar.

•Service revenue increased by $1.8$16.9 million, or 5.5%,49.3%, to $34.8$51.2 million in 2026, driven by sales benefit from the Antares Vision acquisition of $15.3 million, or 44.6%, and favorable pricing.

OperatingCost profitof decreasedsales increased by $18.3$31.0 million, or 36.8%,27.8%, to $31.4$142.7 million in 2026.2026, Thedriven decrease reflectsby the impact of lower volumes of $7.2 million, or 14.5%, and stock-based compensation expense as a result of the Antares Vision acquisition of $10.7$27.1 million, or 21.5%,24.3%, acquisition related amortization and unfavorable mix of $2.1$5.8 million, or 4.2%,5.2%, partially offset by the impact of costlower savingsales actions.volumes.

Our operating philosophy is to deploy cash provided from operating activities, when appropriate, to provide value to stockholders by reinvesting in existing businesses, by making acquisitions that will strengthen and complement our portfolio; by divesting businesses that are no longer strategic or aligned with our portfolio and where such divestitures can generate capacity for strategic investments and initiatives that further optimize our portfolio; by paying dividendsdividends, repurchasing shares and repaying prepayable debt. At any given time, and from time to time, we may be evaluating one or more of these opportunities, although we cannot assure you if or when we will consummate any such transactions.

In the three months ended March 31, 2026, we borrowed•Borrowed €317.9 million, or $366.9 million, under the Term Loan B to fund the acquisition of Antares Vision and assumed $123.5 million of Antares Vision debt, which is expected to be paid in the second quarter of 2026. In addition, we repaid $112.4 million of Term Loan A.Vision.