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CRANE CO.
ANNUAL REPORT - FORM 10-K
YEAR END DECEMBER 31, 1994
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
(x) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 1994
-----------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _______________ to _______________
Commission file number 1-1657
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CRANE CO.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-1952290
- ------------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No)
100 First Stamford Place, Stamford, CT 06902
- ---------------------------------------- --------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203) 363-7300
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Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
----------------------- -------------------------
Common shares, par value $1.00 New York Stock Exchange
Preferred Share Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
7 1/4% senior notes due June, 1999
8 1/2% senior notes due March, 2004
-------------------------------------------------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2)has been subject to such filing
requirements for the past 90 days. Yes X No
----- -----
Indicate by check mark if the disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. ( )
Based on the closing sales price of January 31, 1995 the aggregate market value
of the voting stock held by nonaffiliates of the registrant was $822,737,968.
The number of shares outstanding of the registrant's common stock, $1.00 par
value was 30,054,355 at January 31, 1995.
DOCUMENTS INCORPORATED BY REFERENCE
-----------------------------------
Portions of the annual shareholders report for the year ended December 31, 1994
are incorporated by reference into Parts I, II and IV.
Portions of the proxy statement for the annual shareholders meeting May 8, 1995
are incorporated by reference into Parts I and III.
PART I
------
Item 1. Business
--------
Crane is a diversified manufacturer of engineered industrial products
and the nation's largest American distributor of doors, windows and millwork.
Founded in 1855, Crane employs over 10,700 people in North America, Europe,
Asia and Australia.
Strategy
--------
The company's strategy is to grow the earnings of niche businesses
with high market share, build an aggressive and committed management team
whose interests are directly aligned to those of the shareholders, and
maintain a focused, efficient corporate structure.
Acquisitions
------------
In the past five years, the company has completed ten acquisitions.
The company completed three acquisitions at a total cost of $240 million in
1994. These three entities had aggregate net sales of approximately $300
million for the year ended December 31, 1993.
The company, through its wholly-owned subsidiary Huttig Sash & Door
Company, acquired a moulding and millwork manufacturing operation in
Prineville, Oregon in May 1994.
In April, 1994, the company purchased Mark Controls Corporation, a
manufacturer of automatic and manually operated valves, and specialized
instruments and controls, for commercial and industrial customers.
The company acquired ELDEC Corporation in March 1994. ELDEC's products
are used worldwide on all major commercial and business aircraft and include:
position indication and control systems, proximity switches and components,
true mass fuel flowmeters, and power conversion components and systems.
In 1993, the company completed five acquisitions at a total cost of
$106 million. In December, the company acquired Burks Pumps, Inc., which has
manufacturing facilities in Piqua, Ohio and Decatur, Illinois and provides
engineered pumps for an array of specialized commercial, industrial and
municipal fluid handling applications. The products are marketed under the
Barnes, Burks, Weinman and Prosser brand names. Also included was a line of
tank cleaning equipment sold under the Sellers brand name for the industrial
clean-in-place market. This acquisition substantially increased Crane's
involvement in niche pump markets.
In October 1993, the company acquired Filon, a manufacturer of
fiberglass-reinforced plastic (FRP) panels. Filon was integrated with the
company's Kemlite unit in the fourth quarter of 1993. The Filon acquisition
significantly expanded Kemlite's position as a supplier of fiberglass-
reinforced plastic (FRP) panels to the recreational vehicle market.
In April and May 1993 Huttig Sash and Door Company expanded its
nationwide millwork distribution by acquiring Rondel's Inc., a millwork
distributor serving the eastern Washington/western Idaho region, and the
Whittier-Ruhle Millwork Company, serving the Mid-Atlantic region.
Perf low Instruments, Ltd., a British manufacturer of pressure and
flow measurement equipment, was added to Crane Ltd in 1993.
In 1992, certain assets of Jenkins Canada, Inc., a manufacturer of
bronze and iron valves, were acquired as an addition to the company's North
American valve unit.
In 1990 the company acquired Lear Romec, a manufacturer of oil
lubrication and fuel boost pumps for the aerospace industry.
-1-
PART I
------
Item 1. Business (continued)
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Divestitures
------------
In the past five years, the company has divested five businesses. In
December, 1994, Huttig sold its window manufacturing business for $2.4
million. The transaction excluded real estate and receivables. In July, 1994,
the company sold Modulinc, the fiber optic channel product line of ELDEC. In
April 1993, the company sold its precision ordnance business, UniDynamics/
Phoenix for approximately $6 million. In 1990 the company sold Sea-Pac Sales
Co., a distributor of floor covering products, and its McAvity division, a
Canadian manufacturer of waterwork valves and hydrants for an aggregate sales
price of approximately $19 million.
Long-Term Financing
-------------------
In June 1994 the company sold $150,000,000 7 1/4% notes that will
mature on June 15, 1999. During March 1992 the company sold $100,000,000 8
1/2% notes that will mature on March 15, 2004.
Business Segments
-----------------
See pages 28 and 29 of the Annual Report to Shareholders for sales,
operating profit and assets employed of each business segment.
Fluid Handling
--------------
The Fluid Handling segment consists of a valve business that serves
the global valve market and a pump business which manufactures pumps used in
the chemical, general industrial and commercial industries. The Crane valve
business with manufacturing facilities in North America, the United Kingdom
and Australia, sells a wide variety of valves and fluid control products for
the chemical and hydrocarbon processing, power, general industrial and
commercial construction industries. The North American unit also provides a
full range of valve aftermarket services including parts, repairs and
modifications. The company's subsidiary in the United Kingdom also maintains
repair and service facilities for valves, compressors, heat exchangers and
similar equipment. In 1994, the company purchased Mark Controls, whose valve
products are sold under the Pacific Valves and Flowseal/Centerline brands.
Crane Pumps & Systems, Inc., which includes Burks Pumps purchased in December
1993, manufactures pumps used in the chemical and hydrocarbon processing,
power, and the municipal, general industrial and commercial construction
industries. The company's Cochrane Environmental Systems division designs and
markets water and wastewater equipment for almost every major industry.
The Mark Controls acquisition strengthened the Crane valve business.
This acquisition brings to Crane the Flowseal and Centerline brand of quarter
turn valves and the Pacific pressure seal and HF Acid valves. To focus
resources, the Crane valve business was reorganized on a global basis under
one management structure in 1994. This has allowed Crane to greatly expand
sales distribution channels world-wide and eliminate overlapping coverage.
This is especially true of the Mark Controls quarter turn line where
distribution channels have been expanded to Europe, the Middle East, Asia, and
Australia through Crane's established network.
The Burks Pumps acquisition in December 1993 tripled Crane's pump
business to $93 million in 1994. The pump business has been consolidated under
a new entity named Crane Pumps & Systems with world-wide responsibility for
the manufacturing and marketing of the Chempump, Deming, Barnes, Burks,
Weinman and Prosser/Enpo product lines.
Products in this segment are sold directly to end users through
Crane's sales organizations and through independent distributors and
manufacturers' representatives.
-2-
PART I
------
Item 1. Business (continued)
--------
Aerospace
---------
The Aerospace segment consists of ELDEC, Hydro-Aire, and Lear Romec.
The ELDEC acquisition in 1994 brought a strong technology base and
high market share, with established products on all major commercial and
business aircraft. ELDEC designs, manufactures and markets custom position
indication and control systems, proximity switches and components, true mass
fuel flowmeters, power conversion components and systems for the commercial,
business and military aerospace industries. These products are custom designed
for specific aircraft to meet technically demanding requirements of the
aerospace industry. ELDEC has promising new products in development including
an infrared-based gate to aircraft high speed data link, as well as new
applications of its core power conversion technology within the
telecommunications and industrial markets.
Hydro-Aire designs, manufactures and sells anti-skid and automatic
braking systems, fuel and hydraulic pumps, and coolant pumps and systems,
hydraulic and pneumatic valves and regulators, actuators and solid state
components for the commercial, business and military aerospace industries as
original equipment. In addition, the company designs and manufactures systems
similar to those above for the retrofit of aircraft with improved systems and
manufactures replacement parts for systems installed as original equipment by
the aircraft manufacturer. All of these products are largely proprietary to
the company and, to some extent, are custom designed to the requirements and
specifications of the aircraft manufacturer or program contractor. These
systems and replacement parts are sold directly to airlines, governments, and
aircraft maintenance and overhaul companies.
Lear Romec designs, manufactures and sells lubrication pumps and fuel
pumps for aircraft and aircraft engines for the commercial and military
aerospace industries. Lear Romec has a leading share of the non-captive
market for turbine engine lube and scavenge oil pumps. Also, it is the
leading supplier of fuel boost and transfer pumps for commuter and business
aircraft.
-3-
PART I
------
Item 1. Business (continued)
--------
Engineered Materials
--------------------
The Engineered Materials segment consists of five businesses: Kemlite,
Cor Tec, Resistoflex, Polyflon and Crane Plumbing.
Kemlite manufactures fiberglass-reinforced plastic panels for use
principally by the transportation industry in refrigeration and dry van truck
trailers and recreational vehicles. Kemlite products are also sold to the
commercial construction industry for food processing, fast food restaurant and
supermarket applications, and to institutions where fire rated materials with
low smoke generation and minimum toxicity are required. Kemlite sells its
products directly to the truck trailer and recreational vehicle manufacturers.
Kemlite uses distributors to serve its commercial construction market and some
segments of the recreational vehicle market.
Cor Tec is the leading domestic manufacturer of fiberglass-reinforced
laminated panels serving the truck and truck trailer segment of the
transportation industry. Cor Tec markets its products directly to the truck
and truck trailer manufacturers.
Resistoflex is engaged in the design, manufacture and sale of
corrosion-resistant, plastic-lined steel pipes, fittings, valves, bellows and
hose used primarily by the pharmaceutical, chemical processing, pulp and
paper, petroleum distribution, and waste management industries. It also
manufactures high-performance, separable fittings for operating pressures to
8,000 PSI and flexible plastic-lined assemblies used primarily in the
aerospace industry. Resistoflex sells its industrial products through
distributors who provide stocking and fabrication services to industrial users
in the United States. Its aerospace products are sold directly to the
aerospace industry.
Polyflon manufactures radio frequency and microwave components,
capacitors, circuit processing, substrates and antennas for commercial and
aerospace uses, and resonating structures for the medical industry.
Crane Plumbing manufactures plumbing fixtures in Canada. Its products
are sold through distribution in Canada and it has a large share of the
Canadian plumbing fixtures market.
Crane Controls
--------------
This segment originated from the Mark Controls acquisition in April
1994 and includes five businesses: Barksdale, Powers Process Controls, Dynalco
Controls, Azonix, and Ferguson. The companies in this segment design,
manufacture and market industrial and commercial products that control flows
and processes in various industries including the petroleum, chemical,
construction, food and beverage, power generation industries and
transportation.
Barksdale manufactures solid state and electromechanical pressure and
vacuum switches, pressure transducers, temperature switches, and directional
control valves which serve a broad range of commercial and industrial
applications. It has manufacturing and marketing facilities in the United
States and Germany.
Powers Process Controls designs, manufactures and markets
microprocessor-based process controllers and instrumentation, pneumatic
actuated control valves, self-contained temperature regulators, water mixing
and thermal shock protection shower valves and plumbing brass for industrial
applications and the institutional construction industry.
Dynalco Controls designs and manufactures rotational speed sensors,
monitoring instruments, and ignition and air to fuel control systems.
Dynalco's products are used worldwide by industries in a variety of
applications, including stationary natural gas engines, power generation, oil
and gas production and transmissions, and agriculture equipment.
-4-
PART I
------
Item 1. Business (continued)
--------
Azonix manufactures high precision data acquisition, control systems
and operator interfaces for a wide range of industries which require equipment
to withstand harsh environments.
Ferguson designs and manufactures in the United States and through
Ferguson Machine S.A. in Europe, precision index and transfer systems for use
on and with machines which perform automatic forming, assembly, metal cutting,
testing and inspection operations, Products include index drives and tables,
mechanical parts handlers, in line transfer machines, rotary tables, press
feeds and custom cams.
The products in this segment are sold directly to end users, and
engineering contractors through the company's own sales forces and
cooperatively with sales representatives, stocking specialists and industrial
distributors.
Merchandising Systems
---------------------
National Vendors is the industry leader in the design and manufacture
of electronic vending machines for the automatic merchandising industry in the
United States. Products include machines which dispense snacks foods and
confections, refrigerated and frozen foods, hot drinks, and cold beverages.
National Vendors introduced the Cafe System "7" in 1994 designed as an
alternative to traditional batch brew coffee services. It has enabled National
Vendors to penetrate the office coffee service market. National Vendors also
introduced its Ice Cream Center, a single serve dispenser of novelty ice cream
products. All these products are marketed in North America directly to vending
machine operators. In Europe products are marketed through wholly-owned
subsidiaries with operations located in the United Kingdom, Germany and
France. In 1993 National Vendors introduced its Glasco product line which is
marketed through domestic and international distribution channels.
National Rejectors, GmbH designs and manufactures electronic coin
validators and handling systems for vending operations throughout Europe.
These devices are sold directly to the vending, amusement, soft-drink, and
ticket issuing industries.
Wholesale Distribution
----------------------
The company distributes millwork products through its wholly-owned
subsidiary, Huttig Sash & Door Company ("Huttig"). These products include
doors, windows, mouldings and related building products. Huttig assembles
certain of these products to customer specification prior to distribution.
Its principal customers are building material dealers and building contractors
that service the new construction and remodeling markets. Wholesale
operations are conducted nationally through forty-four branch warehouses
throughout the United States, in both major and medium-sized cities. Huttig's
sales are made on both a direct shipment and out-of-warehouse basis entirely
through its own sales force.
Huttig maintains a saw mill and a manufacturing plant in Montana,
where it produces certain of the above products and other finished lumber, the
bulk of which is sold directly to third parties, some of whom compete with
Huttig branches. Huttig acquired a specialty moulding and millwork
manufacturing operation in Prineville, Oregon in 1994. The majority of the
moulding products are sold to third parties but Huttig is the largest
customer.
Valve Systems and Controls is a value added industrial distributor
providing power operated valves and flow control systems to the petroleum,
chemical, power and general processing industries. It services its customers
through facilities in Texas, Louisiana, and Oklahoma.
-5-
PART I
------
Item 1. Business (continued)
--------
Crane Supply, a distributor of plumbing supplies, valves and piping in
Canada, maintains thirty-eight branches throughout Canada and is the largest
single distributor for Crane manufactured products in that country. Crane
Supply also distributes products which are both complementary to and partly
competitive with Crane's own manufactured products.
Other
-----
The other segment consists of Crane Defense Systems, which is the only
Crane business focused on defense industry products. Crane Defense Systems is
engaged in the development and manufacture of specialized handling systems,
elevators, winches, ground support equipment cranes and associated
electronics. These products are sold directly to the government and defense
contractors and represent less than 1% of 1994 sales.
Competitive Conditions
----------------------
The company's lines of business are conducted under actively
competitive conditions in each of the geographic and product areas they serve.
Because of the diversity of the classes of products manufactured and sold,
they do not compete with the same companies in all geographic or product
areas. Accordingly, it is not possible to estimate the precise number of
competitors or to identify the principal methods of competition. Although
reliable statistics are not available, the company believes that it is an
important supplier to a number of market niches and geographic areas.
The company's products have primary application in the industrial,
construction, aerospace, automated merchandising, transportation, and fluid
handling industries. As such, they are dependent upon numerous unpredictable
factors, including changes in market demand, general economic conditions,
residential and commercial building starts, and capital spending. Because
these products are also sold in a wide variety of markets and applications,
the company does not believe it can reliably quantify or predict the possible
effects upon its business resulting from such changes.
Seasonality is a factor in Huttig and the Canadian operations.
Order backlog totalled approximately $420 million as of December 31,
1994, compared with $226 million as of December 31, 1993. The 1994
acquisitions accounted for the majority of the increase. Backlog is not
material to understanding Crane's overall business because long-term contracts
are not customary to significant portions of its business, except within the
aerospace related businesses.
There is a world-wide shortage of glass fiber reinforcement that has
caused this key raw material for Kemlite to be allocated. Kemlite's markets
will remain strong in 1995 positioning them for further expansion when the
supply is eased.
The company's engineering and product development activities are
directed primarily toward improvement of existing products and adaptation of
existing products to particular customer requirements. While the company owns
numerous patents and licenses, none are of such importance that termination
would materially affect its business. Product development and engineering
costs aggregated approximately $46,400,000 in 1994 ($18,400,000 and
$23,300,000 in 1993 and 1992, respectively). Included in these amounts were
approximately $9,500,000 and $4,100,000 received by the company in 1994 and
1992, respectively, for customer sponsored research and development. The
increase in 1994 was mainly due to the ELDEC acquisition.
-6-
PART I
------
Item 1. Business (continued)
--------
Costs of compliance with federal, state and local laws and regulations
involving the discharge of materials into the environment or otherwise
relating to the protection of the environment are not expected to have a
material effect upon the company or its competitive position.
Item 2. Properties
----------
MANUFACTURING FACILITIES* NUMBER AREA
------------------------- ------ ----
Fluid Handling
United States 13 1,405,000 sq. ft.
Canada 2 137,000 sq. ft.
Other International 5 879,000 sq. ft.
Aerospace
United States 4 569,000 sq. ft.
Other International 1 8,000 sq. ft.
Engineered Materials
United States 7 695,000 sq. ft.
Canada 3 601,000 sq. ft.
Crane Controls
United States 7 464,000 sq. ft.
Other International 3 81,000 sq. ft.
Merchandising Systems
United States 2 730,000 sq. ft.
Other International 1 124,000 sq. ft.
Wholesale Distribution 2 888,000 sq. ft.
Other 1 113,000 sq. ft.
*Includes plants under lease agreements
Leased Leases
Manufacturing Expiring
Facilities Number Area Through
------------- ------ ---- --------
United States 8 354,000 sq. ft. 2017
Canada 1 10,000 sq. ft. 1995
Other International 5 91,000 sq. ft. 2013
Fluid Handling operates four valve service centers in the United
States, of which two are owned. This segment operates internationally five
distribution and five service centers.
Crane Controls operates two distribution centers internationally.
Merchandising Systems operates eight distribution centers in the
United States and six internationally.
Wholesale Distribution has forty-four Huttig branch warehouses in the
United States, of which twenty-seven are owned. The Canadian wholesale
operation maintains thirty-eight distribution branch warehouses in Canada, of
which fifteen are owned. Valve Systems and Controls operates three leased
distribution facilities in the United States.
In the opinion of management, properties have been well maintained,
are in sound operating condition, and contain all necessary equipment and
facilities for their intended purposes.
-7-
PART I
------
Item 3. Legal Proceedings
-----------------
Neither the company, nor any subsidiary of the company has become a
party to, nor has any of their property become the subject of any material
legal proceeding other than ordinary routine litigation incidental to their
businesses.
The following proceeding is included herein because it has been
reported in the media. On September 22, 1992 the company was served with a
complaint filed in the U.S. District Court, Eastern District of Missouri
naming the company and its former subsidiary CF&I Steel Corporation ("CF&I")
as defendants and alleging violations of the False Claims Act in connection
with the distribution of CF&I to the company's shareholders in 1985 (Civil
Actions Nos. 91-0429-C-1 and 4:92CVOO5144JCH). The complaint alleges a
continuing agreement and concerted action between the company and CF&I to
distribute CF&I to the company's shareholders, thereafter to terminate CF&I's
pension plan so as to cause the Pension Benefit Guaranty Corporation ("PBGC")
to assume CF&I's liability for unfunded pension liabilities and to prevent the
PBGC from obtaining any reimbursement from the company, and to publish and
file misleading information in furtherance of that objective. The complaint
alleges unfunded pension liabilities of $140 million and the company is
informed that the complaint is proposed to be amended to increase such
unfunded liability amount to in excess of $270 million. The complaint as
originally filed and as proposed to be amended seeks treble damages and
attorney's fees. The company believes the plaintiff has no standing, the False
Claims Act does not apply and that the allegations are without merit. On June
1, 1993 the federal court in the Eastern District of Missouri dismissed the
complaint for lack of standing of the plaintiff and the plaintiff appealed. In
November, 1994 the Eighth Circuit Court of Appeals reinstated the action. The
company intends to file a petition for certiorari to the U.S. Supreme Court.
In all events the company will vigorously defend itself against this
litigation and believes that the complaint will ultimately be dismissed.
The following proceedings are not considered by the company to be
material to its business or financial condition and are reported herein
because of the requirements of the Securities and Exchange Commission with
respect to the descriptions of administrative or judicial proceedings by
governmental authorities arising under federal, state or local provisions
regulating the discharge of materials into the environment or otherwise
relating to the protection of the environment.
In a letter dated October 15, 1992 the office of the Attorney General
of the State of Ohio advised Cor Tec, a division of Dyrotech Industries, Inc.
which is a subsidiary of the company, that Cor Tec's plant facility in
Washington Court House, Ohio, had operated numerous air contaminant sources in
its manufacturing process which emitted air pollutants for an extended period
of time without the required state permits. The Ohio Attorney General's office
also alleged that certain contaminant sources at the Cor Tec facility were
installed without obtaining permits to install. The main air contaminant in
question is styrene, a volatile organic compound that is alleged to be a
carcinogen. Cor Tec recently constructed an air remediation system in its
plant which included the installation of a hood, vent and incinerator to
capture and incinerate the styrene emissions. At a meeting in Columbus, Ohio
on March 4, 1993 the Attorney General's office proposed that Cor Tec and the
company sign a Consent Decree which would include general injunctive relief
and civil penalties in the amount of $4.6 million. Cor Tec has refused to
execute such a Decree or pay a penalty. No formal complaint has been filed by
the Ohio Attorney General against the company or Cor Tec with regard to the
styrene emissions. Cor Tec believes it has adequate defenses to the
allegations made by the Attorney General and it plans to vigorously resist
paying any damages, fines, or penalties.
On July 12, 1985 the company received written notice from the United
States Environmental Protection Agency (the "EPA") that the EPA believes the
company may be a potentially responsible party ("PRP") under the Federal
Comprehensive Environmental Response Compensations and Liability Act of 1980
("CERCLA") to pay for investigation and corrective measures which may be
required to be taken at the Roebling Steel Company site in Florence Township,
Burlington County, New
-8-
PART I
------
Item 3. Legal Proceedings (continued)
-----------------
Jersey (the "Site") of which its former subsidiary, CF&I Steel Corporation
("CF&I") was a past owner and operator prior to the enactment of CERCLA. The
stated grounds for the EPA's position was the EPA's belief that the company
had owned and/or operated the Site. The company had advised the EPA that such
was not the case and does not believe that it is responsible for any testing
or clean-up at the Site based on current facts. CF&I also has received notice
from the State of New Jersey Department of Environmental Protection, Office of
Regulatory Services ("NJDEP)", advising CF&I that an investigation by the
NJDEP had identified what was considered an existing and potential
environmental problem at the Site. As a past owner and operator at the Site,
CF&I was notified of the NJDEP's belief that further investigatory action was
needed to identify all potential environmental problems at the Site and
thereafter formulate and implement a remedial plan to address any identified
problems. The NJDEP has subsequently requested information from CF&I, and CF&I
has cooperated in providing information, including results of tests which CF&I
has conducted at the Site. The EPA identified sources of contamination, which
must be examined for potential environmental damage, including: chemical waste
drums, storage tanks, transformers, impressed gas cylinders, chemical
laboratories, bag house dust, rubber tires, inactive railroad cars, wastewater
treatment plants, lagoons, slag disposal areas, and a landfill. On November 7,
1990 CF&I filed a petition for reorganization and protection under Chapter 11
of the United States Bankruptcy Code. The EPA has disclosed that two surface
clean-ups have been performed at a cost in excess of $2,000,000 and a further
surface clean-up has been announced at an estimated cost of approximately
$5,000,000.
On July 1, 1991 the company received a letter from the EPA
providing an update of the clean-up at the Site. The EPA's July 1, 1991 letter
describes a proposed third phase of the investigation, including a Focused
Feasibility Study which defined the nature of contaminants and evaluated
remedial alternatives for two portions of the Site. The estimated cost for the
preferred remedy selected by the EPA for these locations is $12,000,000. In
the bankruptcy proceeding of CF&I the EPA was allowed an unsecured claim
against CF&I for $27.1 million related to EPA's environmental investigations
and remediation at the Roebling Site. Based on the analysis above, the company
does not believe it is responsible for any portion of the clean-up.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
There have been no matters submitted to a vote of security holders
during the fourth quarter of 1994.
-9-
PART I
------
EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------
The executive officers of the registrant are as follows:
Officer
Name Position Business Experience Age Since
- ---- -------- ------------------- ------- -------
Robert S. Evans Chairman, Chief Chairman, Chief 51 1974
Executive Officer Executive Officer and
and President President of the
company
L.Hill Clark(2) Executive Vice Executive Vice President of 50 1994
President the company, previously
President of Lear Romec,
and previously held
various positions within
Allied Signal Inc.
Robert J. Muller, Jr. Executive Vice Executive Vice President of 48 1988
President the company
Paul R. Hundt Vice President Vice President, Secretary 55 1976
Secretary and and General Counsel of the
General Counsel company
Anthony D. Pantaleoni Vice President Vice President - Environment, 40 1989
Environment, Health & Safety
Health & Safety
Richard B. Phillips Vice President Vice President - Human 51 1987
Human Resources Resources of the company
David S. Smith(1) Vice President- Vice President - Finance 38 1991
Finance and and Chief Financial Officer
Chief Financial of the company, previously
Officer Vice President - Corporate
Development of the company,
and previously Vice President
of Corporate Finance of
Bankers Trust Company
Michael L. Raithel Controller Controller of the company 47 1985
Gil A. Dickoff Treasurer Treasurer of the company, 33 1992
previously Assistant Treasurer
of the company
(1) Effective March 21, 1994
(2) Effective January 27, 1994
-10-
PART II
The information required by Items 5 through 8 is hereby
incorporated by reference to Pages 8 through 31 of the Annual Report
to Shareholders.
Item 9. Changes in and Disagreements on Accounting and Financial Disclosure
-------------------------------------------------------------------
Not applicable
PART III
--------
Item 10. Directors and Executive Officers of the Registrant
--------------------------------------------------
The information required by Item 10 is incorporated by reference
to the definitive proxy statement which the company will file with
the Commission pursuant to Regulation l4A except that such
information with respect to Executive Officers of the Registrant is
included, pursuant to Instruction 3, paragraph (b) of Item 401 of
Regulation S-K, under Part I.
Item 11. Executive Compensation
----------------------
The information required by Item l1 is incorporated by reference
to the definitive proxy statement which the company will file with
the Commission pursuant to Regulation l4A.
Item 12. Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------
The information required by Item 12 is incorporated by reference
to the definitive proxy statement which the company will file with
the Commission pursuant to Regulation 14A.
Item 13. Certain Relationships and Related Transactions
----------------------------------------------
The information required by Item 13 is incorporated by reference
to the definitive proxy statement which the company will file with
the Commission pursuant to Regulation 14A.
-11-
PART IV
-------
Item 14. Exhibits, Financial Statement Schedule, and Reports on Form 8-K
---------------------------------------------------------------
Page
----
(a) Financial Statements and Schedule:
Independent Auditors' Report................................... 15
Schedule VIII Valuation and Qualifying Accounts................ 16
The consolidated balance sheets of Crane Co. and subsidiaries as
of December 31, 1994 and 1993 and the related consolidated statements
of income, changes in common shareholders' equity and cash flows for
the years ended December 31, 1994, 1993 and 1992 and the financial
review, appearing on Pages 8 through 31 of Crane Co.'s Annual Report
to Shareholders which will be furnished with the company's proxy
statement as required by Regulation 14A, Rule 14a-3(c), are
incorporated herein by reference and are supplemented by the schedule
on Page 16 of this report.
All other statements and schedules for which provision is made in the
applicable regulation of the Securities and Exchange Commission have
been omitted because they are not required under related instructions
or are inapplicable, or the information is shown in the financial
statements and related notes.
(b) Reports on Form 8-K:
No reports on Form 8-K have been filed during the quarter ended
December 31, 1994.
(c) Exhibits to Form 10-K:
(3) Exhibit A-By-laws
There is incorporated by reference herein:
(a) The company's Articles of Incorporation contained in
Exhibit D to the company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1987.
(4) Instruments Defining the Rights of Security Holders, including
Indentures:
(a) There is incorporated by reference herein:
(1) Preferred Share Purchase Rights Agreement
contained in Exhibit 1 to the company's Report
on Form 8-K filed with the Commission on July
12, 1988.
(2) Amendment to Preferred Share Purchase Rights
Agreement contained in Exhibit 1 to the
company's Report on Form 8-K filed with the
Commission on June 29, 1990.
-12-
PART IV
-------
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
----------------------------------------------------------------
(continued)
(b) There is incorporated by reference herein:
1) Indenture dated as of April 1,1991 between
the Registrant and the Bank of New York
contained in Exhibit 4 to Registration
Statement No. 33-39658.
(10) Material Contracts:
------------------
(iii)Compensatory Plans
Exhibit B: EVA Incentive Compensaton Plan for Executive
Officers
Exhibit C: The forms of Employment/Severance Agreement
between the company and Messrs. Evans, Hundt
and Smith (form I) and Clark and Muller (form
II) which provide for the continuation of
certain employee benefits upon a change of
control.
There is incorporated by reference herein:
(a) The Crane Co. Restricted Stock Award Plan as amended
through May 10,1993 contained in Exhibit A to the
company's annual report on Form 10-K for the fiscal
year ended 12/31/93.
(b) The Crane Co. Non-Employee Directors Restricted Stock
Award Plan as amended through May 10, 1993 contained
in Exhibit B to the company's annual report on Form
10-K for the fiscal year ended 12/31/94.
(c) The Crane Co. Restricted Stock Award Plan contained in
Exhibit 4.1.1 to Post-Effective Amendment No. 2 to the
Registrant's Registration Statement No. 33-22904 on
Form S-8 filed on July 6, 1988 and the related
agreements filed as Exhibit 4.4.2-2 to Post-Effective
Amendment No. 4, Exhibit 4.4.2-3 to Post-Effective
Amendment No. 5 and Exhibit 4.4.2-4 to Post-Effective
Amendment No. 6, and Exhibit 4.4.2-5 to Post-Effective
Amendment No. 7.
(d) The indemnification agreements entered into with Mr.
R. S. Evans, each other director of the company and
Mr. P. R. Hundt the form of which is contained in
Exhibit C to the company's definitive proxy statement
filed with the Commission in connection with the
company's April 27, 1987 Annual Meeting.
(e) The Crane Co. Retirement Plan for Non-Employee
Directors contained in Exhibit E to the company's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1988.
(f) The Crane Co. Stock Option Plan as amended through May
6, 1991 contained in Exhibit 1(a)(2) to Post-Effective
Amendment No. 2 to the company's Registration
Statement No. 33-18251 on Form S-8 filed with the
Commission on November 2, 1987.
(11) Statement re computation of per share earnings:
Exhibit D: Computation of net income per share.
(13) Annual report to security holders:
Exhibit E: Annual Report to shareholders for the year
ended December 31, 1994.
(21) Subsidiaries of the Registrant:
Exhibit F: Subsidiaries of the Registrant.
(23) Consent of Experts and Counsel
Exhibit G: Independent auditors' consent.
All other exhibits are omitted because they are not applicable
or the required information is shown elsewhere in this Annual
Report on Form 10-K.
-13-
SIGNATURES
- ----------
Pursuant to the requirements of Section l3 or l5(d) of the Securities Exchange
Act of l934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
CRANE CO.
----------------------
(Registrant)
By D. S. Smith
---------------------------
D. S. Smith
Vice President-Finance
Date 2/27/95
-----------------
Pursuant to the requirements of the Securities Exchange Act of l934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
OFFICERS
--------
R. S. Evans
- --------------------------
R. S. Evans
Chairman, Chief Executive Officer, President and Director
Date 2/27/95
-----------------------
D. S. Smith M. L. Raithel
- --------------------------- ------------------------
D. S. Smith M. L. Raithel
Vice President-Finance Controller
Date 2/27/95 Date 2/27/95
----------------------- --------------------
DIRECTORS
---------
C. J. Queenan, Jr.
-------------------------
C. J. Queenan, Jr.
Date 2/27/95
---------------------
M. Anathan, III E. T. Bigelow A. A. Seeligson, Jr.
- ------------------------ ---------------------- -------------------------
M. Anathan, III E. T. Bigelow A. A. Seeligson, Jr.
Date 2/27/95 Date 2/27/95 Date 2/27/95
-------------------- ------------------ ---------------------
R. S. Forte' D. C. Minton B. Yavitz
- ------------------------ ---------------------- -------------------------
R. S. Forte' D. C. Minton B. Yavitz
Date 2/27/95 Date 2/27/95 Date 2/27/95
-------------------- ------------------ ---------------------
D. R. Gardner
-------------------------
D. R. Gardner
Date 2/27/95
---------------------
-14-
INDEPENDENT AUDITORS' REPORT
- ----------------------------
To the Shareholders of Crane Co.:
We have audited the consolidated financial statements of Crane Co. and
subsidiaries as of December 31, 1994 and 1993, and for each of the three years
in the period ended December 31, 1994 and have issued our report thereon dated
January 23, 1995; such financial statements and report are included in your 1994
Annual Report to Shareholders and are incorporated herein by reference. Our
audits also included the consolidated financial statement schedule of Crane Co.,
listed in Item 14. This financial statement schedule is the responsibility of
the Company's management. Our responsibility is to express an opinion on this
schedule based on our audits. In our opinion, such financial statement
schedule, when considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.
DELOITTE & TOUCHE LLP
Stamford, Connecticut
January 23, 1995
-15-
CRANE CO. AND SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
(In Thousands)
Balance at Additions Balance
Beginning Charged to at End
Description of Year Cost & Expenses Deductions of Year
- ----------- ---------- --------------- ---------- -------
Year Ended December 31, 1994:
- -----------------------------
Allowance for doubtful accounts $ 2,054 $ 8,434 $ 8,288 $ 2,200
Allowance for cash discounts,
returns and allowances 1,000 17,096 16,603 1,493
------- -------- -------- -------
$ 3,054 $ 25,530 $ 24,891 $ 3,693
======= ======== ======== =======
Year Ended December 31, 1993:
- -----------------------------
Allowance for doubtful accounts $ 859 $ 2,747 $ 1,552 $ 2,054
Allowance for cash discounts,
returns and allowances 812 11,839 11,651 1,000
------- -------- -------- -------
$ 1,671 $ 14,586 $ 13,203 $ 3,054
======= ======== ======== =======
Year Ended December 31, 1992:
- -----------------------------
Allowance for doubtful accounts $ 1,268 $ 1,038 $ 1,447 $ 859
Allowance for cash discounts,
returns and allowances 708 7,805 7,701 812
------- ------- ------- -------
$ 1,976 $ 8,843 $ 9,148 $ 1,671
======= ======== ======== =======
-16-