So as I mentioned in my prepared remarks, our pipeline has grown significantly over the last year. It’s matured also, in terms of where we’re at in that cultivation status. And we feel very confident and on track, as we exit 2023 that we will be in a position to announce our first acquisition in 2024. As I’ve said many times, that first acquisition is more important than any. We want to make sure, it’s on strategy. Focused on secure detect and authenticate. We want to make sure we’re good owners of the business. And we can add value, particularly through the deployment of CBS. And we want to generate a strong return. And nothing has changed there, from what I’ve said over the last several quarters. That’s a double-digit ROIC by year five. And making sure we’re maintaining our leverage below three or if above three, we’re able to draw that down very, very quickly based on our strong free cash flow.
So again, feel on track and very confident we’re in a good position as we head into 2024.
Isaac Sellhausen: Okay. Very helpful. Thanks so much.
Aaron Saak: Thank you, Isaac.
Operator: Thank you. Our next questions come from the line of Damian Karas with UBS. Please proceed with your question. Damian, could you check if you’re muted, please?
Damian Karas: Yes, I’m sorry, I was muted. Thanks. I got a few follow-up questions. First, I just want to make sure I heard correctly. Did you say that you are expecting the currency business to be kind of flat in the first half of the year and then you get some pickup in the back half? Or did I mishear you there?
Aaron Saak: No, that’s directionally correct, Damian. That’s — I’d say, mid-single-digit growth as Christina alluded to in the international business, but then the headwind in the first half due to the shutdown from the US government.
Damian Karas: Okay. All right. So then, I guess I’m just trying to piece together kind of like that 40-60 first half, second half, which would I guess more or less suggest like 15% to 20% decline year-over-year in the first half and then you kind of get this step back in the second half. If I’m interpreting correctly then, so then, it seems like kind of like the destocking and CPI is expected to be significantly worse kind of at the outset of the year and then really snaps back in the back half?
Aaron Saak: I think you have that right. Exactly, Damian. We’re going to hit tougher comps year-over-year in the first half on CPI, where gaming was still at a very elevated level in the first half of last year. So your logic there is correct.
Damian Karas: Okay. I appreciate you clarifying that. And then, sorry if I — if you guys alluded to this earlier, but I was just curious, thinking about the denomination redesign cycle here in the US. When do you think you might have a better sense whether the $10 redesign will involve micro-optics?
Aaron Saak: I would answer that that we feel very confident in our long-standing relationship with the BEP. But as I said before, we’re not going to be in any position to comment on the new redesign until after the treasury has announced that redesign. And I would expect that will come sometime in late ’25. Again, that’s more their time line than ours on the announcement. But I think you can appreciate, we can’t comment on that until it’s actually announced by the US government.
Operator: Thank you. Our final questions will come from the line of Matt Summerville with D.A. Davidson. Please proceed with your question.
Matt Summerville: Yes. You sort of answered it with respect to the prior questions, but I wanted to just put a finer point on it. I mean CPI organic is going to be down based on what you said, very substantially in the first half of the year. How should we think about margins in that context? How bad will this business delever? And are you doing anything, in the near term to adjust the cost structure in that business. I just want to make sure I’m not taking this — getting over my skis in my assumptions. But CPI is going to kind of get hammered, if lack of a better word there.
Aaron Saak: Well, I think look at the balance of it too, Matt. I think directionally, we’re going to have a tough comp in these headwinds on orders in gaming. That’s roughly 25% of the portfolio, offset by the other 75% that’s still growing at roughly mid-single digits. So, that’s the balance of the math. Now, I would tell you the first half of CPI, when you put that and balance it together probably isn’t quite as you alluded to. And then of course, the second half, we come out back on track with this mid-single-digit growth for the second half of the year. I think you can rest assured and I think it’s true to our culture, and how we’ve operated the business and we’re obviously, taking actions and we’ve already taken some of those actions to fortify the margins of the business, so that of course, we maintain a good, healthy cost discipline and we invest as we grow and we’ve adjusted some of the cost structure of CPI to reflect these headwinds.
So certainly, I wouldn’t think it’s quite as drastic as maybe you’re thinking.
Q – Matt Summerville: Okay. Great. Thanks, Aaron. That’s it for me.
Aaron Saak: Thanks, Matt.
Operator: Thank you. There are no further questions, at this time. I would now like to hand the call back over to Aaron Saak for closing remarks.
Aaron Saak: All right. Thank you, operator. Well, it’s hard to believe, but we are just 50 days away from the first anniversary of the launch of Crane NXT. It’s a year that is flown by and been filled, with enormous accomplishments by our team. And so I want to again, thank all the NXT team members from across the world for their hard work in 2023, to make the launch of Crane NXT so successful. And I am extremely confident, that 2024 will be an equally exciting year for the company as we start our second year as a public company. So thank you again, to everyone who joined us today for your questions, and I hope you all have a great rest of your week.
Operator: Thank you. That does conclude today’s teleconference. We appreciate your participation. You may disconnect at this time. Enjoy the rest of your day.
