Attached files
| file | filename |
|---|---|
| 8-K - 8-K - CRANE CO /DE/ | a8-kxq32012asbestosander.htm |
| EX-99.1 - EXHIBIT 99.1 - CRANE CO /DE/ | exhibit991-pressreleasexq3.htm |
Exhibit 99.2
CRANE CO.
Income Statement Data
(in thousands, except per share data)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||
Net Sales: | |||||||||||||||||
Aerospace & Electronics | $ | 178,591 | $ | 172,216 | $ | 525,127 | $ | 505,690 | |||||||||
Engineered Materials | 54,487 | 53,101 | 169,603 | 175,034 | |||||||||||||
Merchandising Systems | 97,577 | 98,815 | 277,741 | 287,703 | |||||||||||||
Fluid Handling | 302,318 | 299,118 | 903,617 | 845,929 | |||||||||||||
Controls | 24,713 | 23,838 | 73,192 | 66,209 | |||||||||||||
Total Net Sales | $ | 657,686 | $ | 647,088 | $ | 1,949,280 | $ | 1,880,565 | |||||||||
Operating Profit (Loss) from Continuing Operations: | |||||||||||||||||
Aerospace & Electronics | $ | 39,833 | $ | 35,640 | $ | 116,834 | $ | 106,839 | |||||||||
Engineered Materials | 7,226 | 5,919 | 21,178 | 25,192 | |||||||||||||
Merchandising Systems | 9,496 | 10,845 | 23,324 | 22,632 | |||||||||||||
Fluid Handling | 42,892 | 39,870 | 108,920 | 111,474 | |||||||||||||
Controls | 2,844 | 3,789 | 10,513 | 8,892 | |||||||||||||
Corporate | (15,707 | ) | (15,773 | ) | (46,511 | ) | (44,453 | ) | |||||||||
Total Operating Profit from Continuing Operations | 86,584 | 80,290 | 234,258 | 230,576 | |||||||||||||
Interest Income | 443 | 442 | 1,292 | 1,121 | |||||||||||||
Interest Expense | (6,618 | ) | (6,474 | ) | (20,114 | ) | (19,525 | ) | |||||||||
Miscellaneous- Net | (6 | ) | (73 | ) | (704 | ) | 3262* | ||||||||||
Income from Continuing Operations Before Income Taxes | 80,403 | 74,185 | 214,732 | 215,434 | |||||||||||||
Provision for Income Taxes | 23,997 | 22,966 | 64,515 | 66,936 | |||||||||||||
Income from Continuing Operations | 56,406 | 51,219 | 150,217 | 148,498 | |||||||||||||
Profit from Discontinued Operations attributable to common shareholders (a) | — | 1,826 | 3,777 | 3,777 | 4,343 | ||||||||||||
Gain from Sales of Discontinued Operations attributable to common shareholders (b) | 1,385 | — | 29,445 | 29,445 | — | ||||||||||||
Profit from Discontinued Operations attributable to common shareholders, net of tax (a) | — | 1,187 | 2,456 | 2,823 | |||||||||||||
Gain from Sales of Discontinued Operations attributable to common shareholders, net of tax (b) | 900 | — | 19,176 | — | |||||||||||||
Gain / Profit from Discontinued Operations, net of tax | 900 | 1,187 | 21,632 | 2,823 | |||||||||||||
Net income before allocation to noncontrolling interests | 57,307 | 52,406 | 171,850 | 151,321 | |||||||||||||
Less: Noncontrolling interest in subsidiaries' earnings | 182 | (134 | ) | 501 | (123 | ) | |||||||||||
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Net income attributable to common shareholders | $ | 57,125 | $ | 52,540 | $ | 171,349 | $ | 151,444 | |||||||||
Share Data: | |||||||||||||||||
Earnings per share from Continuing Operations | $ | 0.97 | $ | 0.87 | $ | 2.56 | $ | 2.50 | |||||||||
Earnings per share from Discontinued Operations | 0.02 | 0.02 | 0.37 | 0.05 | |||||||||||||
Earnings per Diluted Share | $ | 0.99 | $ | 0.89 | $ | 2.93 | $ | 2.55 | |||||||||
Average Diluted Shares Outstanding | 57,873 | 59,058 | 58,435 | 59,330 | |||||||||||||
Average Basic Shares Outstanding | 57,123 | 58,048 | 57,565 | 58,202 | |||||||||||||
Supplemental Data: | |||||||||||||||||
Cost of Sales | $ | 424,954 | $ | 428,524 | $ | 1,290,671 | $ | 1,235,288 | |||||||||
Selling, General & Administrative | 133,089 | 138,274 | 408,250 | 414,701 | |||||||||||||
Repositioning Charges | 1,354 | — | 16,101 | — | |||||||||||||
Depreciation and Amortization ** | 13,174 | 15,581 | 43,122 | 47,208 | |||||||||||||
Stock-Based Compensation Expense | 4,402 | 3,858 | 12,860 | 11,132 | |||||||||||||
* | Primarily related to the sale of a building and the divestiture of a small product line in the three months ended March 31, 2011. |
** | Amount included within cost of sales and selling, general & administrative costs. |
(a) Amounts represent the operating profit, and after-tax profit, from the Houston Service Center and Azonix Corporation businesses divested in June 2012. |
(b) Amounts represent the pre-tax and after-tax gains from the June 2012 sales of both the Houston Service Center and the Azonix Corporation. |
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CRANE CO.
Condensed Balance Sheets
(in thousands)
September 30, 2012 | December 31, 2011 | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and Cash Equivalents | $ | 280,536 | $ | 245,089 | ||||
Accounts Receivable, net | 403,688 | 349,250 | ||||||
Current Insurance Receivable - Asbestos | 16,345 | 16,345 | ||||||
Inventories, net | 366,845 | 360,689 | ||||||
Other Current Assets | 65,063 | 60,859 | ||||||
Total Current Assets | 1,132,477 | 1,032,232 | ||||||
Property, Plant and Equipment, net | 271,384 | 284,146 | ||||||
Long-Term Insurance Receivable - Asbestos | 199,264 | 208,952 | ||||||
Other Assets | 456,934 | 497,377 | ||||||
Goodwill | 812,453 | 820,824 | ||||||
Total Assets | $ | 2,872,512 | $ | 2,843,531 | ||||
LIABILITIES AND EQUITY | ||||||||
Current Liabilities | ||||||||
Notes Payable and Current Maturities of Long-Term Debt | $ | 1,114 | $ | 1,112 | ||||
Accounts Payable | 173,328 | 194,158 | ||||||
Current Asbestos Liability | 100,943 | 100,943 | ||||||
Accrued Liabilities | 217,261 | 226,717 | ||||||
Income Taxes | 28,618 | 10,165 | ||||||
Total Current Liabilities | 521,264 | 533,095 | ||||||
Long-Term Debt | 399,048 | 398,914 | ||||||
Long-Term Deferred Tax Liability | 42,545 | 41,668 | ||||||
Long-Term Asbestos Liability | 722,962 | 792,701 | ||||||
Other Liabilities | 253,941 | 255,097 | ||||||
Total Equity | 932,752 | 822,056 | ||||||
Total Liabilities and Equity | $ | 2,872,512 | $ | 2,843,531 | ||||
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CRANE CO.
Condensed Statements of Cash Flows
(in thousands)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Operating Activities: | ||||||||||||||||
Net income attributable to common shareholders | $ | 57,125 | $ | 52,540 | $ | 171,349 | $ | 151,444 | ||||||||
Noncontrolling interest in subsidiaries’ earnings | 182 | (134 | ) | 501 | (123 | ) | ||||||||||
Net income before allocations to noncontrolling interests | 57,307 | 52,406 | 171,850 | 151,321 | ||||||||||||
Gain on divestiture | (1,385 | ) | — | (29,445 | ) | (4,258 | ) | |||||||||
Restructuring - Non Cash | 16 | — | 2,777 | — | ||||||||||||
Depreciation and amortization | 13,174 | 15,581 | 43,122 | 47,208 | ||||||||||||
Stock-based compensation expense | 4,402 | 3,858 | 12,860 | 11,132 | ||||||||||||
Defined benefit plans and postretirement expense | 4,796 | 1,811 | 14,769 | 5,403 | ||||||||||||
Deferred income taxes | 8,674 | 8,219 | 24,417 | 21,739 | ||||||||||||
Cash provided by (used for) operating working capital | 11,292 | 8,479 | (79,322 | ) | (76,912 | ) | ||||||||||
Defined benefit plans and postretirement contributions | (1,642 | ) | (6,696 | ) | (4,463 | ) | (17,054 | ) | ||||||||
Environmental payments, net of reimbursements | (3,953 | ) | (2,601 | ) | (11,256 | ) | (8,735 | ) | ||||||||
Other | (8,696 | ) | (7,654 | ) | (6,005 | ) | (5,617 | ) | ||||||||
Subtotal | 83,985 | 73,403 | 139,304 | 124,227 | ||||||||||||
Asbestos related payments, net of insurance recoveries | (20,834 | ) | (23,612 | ) | (60,051 | ) | (59,233 | ) | ||||||||
Total provided by operating activities | 63,151 | 49,791 | 79,253 | 64,994 | ||||||||||||
Investing Activities: | ||||||||||||||||
Capital expenditures | (6,164 | ) | (9,421 | ) | (19,944 | ) | (27,703 | ) | ||||||||
Proceeds from disposition of capital assets | 396 | 190 | 2,254 | 4,720 | ||||||||||||
Payment for acquisition, net of cash acquired | — | (35,594 | ) | — | (35,594 | ) | ||||||||||
Proceeds from divestiture | 934 | — | 53,599 | 1,000 | ||||||||||||
Total used for investing activities | (4,834 | ) | (44,825 | ) | 35,909 | (57,577 | ) | |||||||||
Financing Activities: | ||||||||||||||||
Dividends paid | (15,923 | ) | (15,098 | ) | (45,998 | ) | (41,957 | ) | ||||||||
Reacquisition of shares on open market | (20,000 | ) | — | (49,991 | ) | (49,999 | ) | |||||||||
Stock options exercised - net of shares reacquired | — | 2,913 | 8,426 | 19,937 | ||||||||||||
Excess tax benefit from stock-based compensation | (45 | ) | 347 | 3,233 | 5,706 | |||||||||||
Change in short-term debt | — | (806 | ) | — | (1,336 | ) | ||||||||||
Total used for financing activities | (35,968 | ) | (12,644 | ) | (84,330 | ) | (67,649 | ) | ||||||||
Effect of exchange rate on cash and cash equivalents | 5,888 | (12,504 | ) | 4,615 | (1,526 | ) | ||||||||||
Increase (decrease) in cash and cash equivalents | 28,237 | (20,182 | ) | 35,447 | (61,758 | ) | ||||||||||
Cash and cash equivalents at beginning of period | 252,299 | 231,365 | 245,089 | 272,941 | ||||||||||||
Cash and cash equivalents at end of period | $ | 280,536 | $ | 211,183 | $ | 280,536 | $ | 211,183 | ||||||||
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CRANE CO.
Order Backlog
(in thousands)
September 30, 2012 | June 30, 2012 | March 31, 2012 | December 31, 2011 | September 30, 2011 | |||||||||||
Aerospace & Electronics | 423,282 | 437,822 | 410,794 | 409,284 | 431,799 | ||||||||||
Engineered Materials | 13,884 | 11,129 | 11,110 | 9,879 | 13,087 | ||||||||||
Merchandising Systems | 23,587 | 30,033 | 15,212 | 20,929 | 26,898 | ||||||||||
Fluid Handling | 334,696 | * | 337,538 | * | 313,715 | * | 328,757 | * | 323,045 | ||||||
Controls | 16,187 | 29,770 | ** | 27,120 | ** | 32,145 | ** | 3,023 | ** | ||||||
Total Backlog | 811,636 | 846,292 | 777,951 | 800,994 | 825,152 | ||||||||||
* | Includes Order Backlog of $2.9 million at March 31, 2012, $1.9 million at December 31, 2011 and September 30, 2011 pertaining to a business divested in June 2012. |
** | Includes Order Backlog of $11.3 million at March 31, 2012, $9.6 million at December 31, 2011 and $11.8 million at September 30, 2011 pertaining to a business divested in June 2012. |
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CRANE CO.
Non-GAAP Financial Measures
(in thousands)
Three Months Ended September 30, | Nine Months Ended Semptember 30, | Percent Change June 30, 2012 | Percent Change June 30, 2012 | |||||||||||||||||||
2012 | 2011 | 2012 | 2011 | Three Months | Six Months | |||||||||||||||||
INCOME ITEMS | ||||||||||||||||||||||
Net Sales | $ | 645,981 | $ | 647,088 | $ | 1,949,280 | $ | 1,880,565 | (0.2 | )% | 3.7 | % | ||||||||||
Operating Profit from Continuing Operations | 69,377 | 78,851 | 147,674 | 150,287 | (12.0 | )% | (1.7 | )% | ||||||||||||||
Percentage of Sales | 10.5 | % | 12.5 | % | 11.3 | % | 12.2 | % | ||||||||||||||
Special Items impacting Operating Profit from Continuing Operations: | ||||||||||||||||||||||
Repositioning Charges (a) | 1,354 | 16,101 | ||||||||||||||||||||
Operating Profit from Continuing Operations before Special Items | $ | 87,938 | $ | 80,290 | $ | 250,359 | $ | 230,576 | 9.5 | % | 8.6 | % | ||||||||||
Percentage of Sales | 13.6 | % | 12.4 | % | 12.8 | % | 12.3 | % | ||||||||||||||
Net Income Attributable to Common Shareholders | $ | 57,125 | $ | 52,540 | $ | 171,349 | $ | 151,444 | ||||||||||||||
Per Share | $ | 0.99 | $ | 0.89 | $ | 2.93 | $ | 2.55 | 11.0 | % | 14.9 | % | ||||||||||
Special Items impacting Net Income Attributable to Common Shareholders: | ||||||||||||||||||||||
Repositioning Charges - Net of Tax (a) | 948 | 12,828 | ||||||||||||||||||||
Per Share | $ | 0.02 | $ | 0.22 | ||||||||||||||||||
Gain on Divestitures - Net of Tax (b) | (900 | ) | (19,176 | ) | ||||||||||||||||||
Per Share | $ | (0.02 | ) | $ | (0.33 | ) | ||||||||||||||||
Net Income Attributable To Common Shareholders Before Special Items | $ | 57,173 | $ | 52,540 | $ | 165,001 | $ | 151,444 | 8.8 | % | 9.0 | % | ||||||||||
Per Basic Share | $ | 1.00 | $ | 0.91 | $ | 2.87 | $ | 2.60 | ||||||||||||||
Per Diluted Share | $ | 0.99 | $ | 0.89 | (c) | $ | 2.82 | $ | 2.55 | 11.0 | % | 10.6 | % | |||||||||
(a) | The Company incurred repositioning charges in the second quarter and third quarter of 2012, associated with productivity actions. The charges included severance and impairment costs related to the shutdown of certain facilities, the transfer of certain manufacturing operations, and staff reduction actions. |
(b) | In June 2012, the Company divested of a business within the Fluid Handling segment (Houston Service Center) and a business within the Controls segment (Azonix Corporation). The associated gains were included in the “Gain from Sale of Discontinued Operations attributable to common shareholders, net of tax" section on the accompanying Income Statement Data. In September 2012, the Company recorded a favorable price adjustment associated with the Azonix Corporation divestiture. |
(c) | For the three months ended September 30, 2011, the $0.89 of earnings per diluted share included $0.87 of earnings per diluted share from continuing operations and $0.02 of earnings per diluted share from discontinued operations. Therefore, the $0.99 of earnings per diluted shares before Special Items for the three months ended September 30, 2012 represents a 14% increase when compared to the $0.87 of earnings per diluted share from continuing operations for the three months ended September 30, 2011. |
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Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
CASH FLOW ITEMS | ||||||||||||||||
Cash Provided from Operating Activities | ||||||||||||||||
before Asbestos - Related Payments | $ | 83,985 | $ | 73,403 | $ | 139,304 | $ | 124,227 | ||||||||
Asbestos Related Payments, Net of Insurance Recoveries | (20,834 | ) | (23,612 | ) | (60,051 | ) | (59,233 | ) | ||||||||
Cash Provided from Operating Activities | 63,151 | 49,791 | 79,253 | 64,994 | ||||||||||||
Less: Capital Expenditures | (6,164 | ) | (9,421 | ) | (19,944 | ) | (27,703 | ) | ||||||||
Free Cash Flow | $ | 56,987 | $ | 40,370 | $ | 59,309 | $ | 37,291 | ||||||||
Certain non-GAAP measures have been provided to facilitate comparison with the prior year.
The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that non-GAAP financial measures which exclude certain non-recurring items present additional useful comparisons between current results and results in prior operating periods, providing investors with a clearer view of the underlying trends of the business. Management also uses these non-GAAP financial measures in making financial, operating, planning and compensation decisions and in evaluating the Company's performance.
In addition, Free Cash Flow provides supplemental information to assist management and investors in analyzing the Company’s ability to generate liquidity from its operating activities. The measure of Free Cash Flow does not take into consideration certain other non-discretionary cash requirements such as, for example, mandatory principal payments on the Company's long-term debt. Non-GAAP financial measures, which may be inconsistent with similarly captioned measures presented by other companies, should be viewed in addition to, and not as a substitute for, the Company’s reported results prepared in accordance with GAAP.
Non-GAAP financial measures, which may be inconsistent with similarly captioned measures presented by other companies, should be viewed in the context of the definitions of the elements of such measures we provide and in addition to, and not as a substitute for, the Company’s reported results prepared in accordance with GAAP.
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