Attached files
| file | filename |
|---|---|
| 8-K - 8-K - CRANE CO /DE/ | a8-kxq32015asbestosander.htm |
| EX-99.1 - EXHIBIT 99.1 - CRANE CO /DE/ | exhibit991-pressreleasexq3.htm |
Exhibit 99.2
CRANE CO.
Income Statement Data
(in millions, except per share data)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, 2015 | September 30, 2015 | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Net Sales: | ||||||||||||||||
Fluid Handling | $ | 264.7 | $ | 314.5 | $ | 832.2 | $ | 949.8 | ||||||||
Payment & Merchandising Technologies | 170.6 | 181.1 | 529.0 | 534.8 | ||||||||||||
Aerospace & Electronics | 171.7 | 167.2 | 500.4 | 513.7 | ||||||||||||
Engineered Materials | 62.9 | 64.7 | 198.4 | 196.1 | ||||||||||||
Total Net Sales | $ | 669.9 | $ | 727.4 | $ | 2,060.0 | $ | 2,194.3 | ||||||||
Operating Profit (Loss): | ||||||||||||||||
Fluid Handling | $ | 29.4 | $ | 48.1 | $ | 96.2 | $ | 144.8 | ||||||||
Payment & Merchandising Technologies | 25.2 | 25.1 | 72.5 | 51.2 | ||||||||||||
Aerospace & Electronics | 36.5 | 29.9 | 98.2 | 98.3 | ||||||||||||
Engineered Materials | 12.5 | 9.0 | 39.0 | 29.6 | ||||||||||||
Corporate | (10.4 | ) | (8.6 | ) | (36.5 | ) | (41.5 | ) | ||||||||
Environmental provision | — | (55.8 | ) | — | (55.8 | ) | ||||||||||
Total Operating Profit | 93.2 | 47.7 | 269.4 | 226.7 | ||||||||||||
Interest Income | 0.5 | 0.4 | 1.4 | 1.1 | ||||||||||||
Interest Expense | (9.1 | ) | (9.6 | ) | (28.5 | ) | (29.1 | ) | ||||||||
Miscellaneous - Net | (0.3 | ) | 0.3 | (0.2 | ) | (1.4 | ) | |||||||||
Income Before Income Taxes | 84.3 | 38.9 | 242.1 | 197.3 | ||||||||||||
Provision for Income Taxes | 27.1 | 10.7 | 77.7 | 60.3 | ||||||||||||
Net income before allocation to noncontrolling interests | 57.2 | 28.2 | 164.4 | 137.0 | ||||||||||||
Less: Noncontrolling interest in subsidiaries' earnings | 0.3 | 0.1 | 0.7 | 0.5 | ||||||||||||
Net income attributable to common shareholders | $ | 56.9 | $ | 28.1 | $ | 163.7 | $ | 136.5 | ||||||||
Share Data: | ||||||||||||||||
Earnings per Diluted Share | $ | 0.97 | $ | 0.47 | $ | 2.78 | $ | 2.28 | ||||||||
Average Diluted Shares Outstanding | 58.8 | 59.9 | 58.8 | 59.7 | ||||||||||||
Average Basic Shares Outstanding | 58.1 | 59.0 | 58.0 | 58.8 | ||||||||||||
Supplemental Data: | ||||||||||||||||
Cost of Sales | $ | 431.1 | $ | 475.8 | $ | 1,341.9 | $ | 1,421.3 | ||||||||
Selling, General & Administrative | 141.4 | 143.6 | 431.2 | 460.7 | ||||||||||||
Environmental Provision | — | 55.8 | — | 55.8 | ||||||||||||
Repositioning Charges (see non-GAAP measures) | 2.0 | 3.4 | 11.7 | 11.6 | ||||||||||||
Acquisition Related Charges (see non-GAAP measures) | 2.2 | 1.1 | 5.8 | 18.3 | ||||||||||||
Depreciation and Amortization * | 16.5 | 18.0 | 49.9 | 58.0 | ||||||||||||
Stock-Based Compensation Expense * | 5.0 | 5.4 | 15.8 | 15.9 | ||||||||||||
* Amount included within Cost of Sales and Selling, General & Administrative costs. | ||||||||||||||||
1
CRANE CO.
Condensed Balance Sheets
(in millions)
September 30, 2015 | December 31, 2014 | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and Cash Equivalents | $ | 335.2 | $ | 346.3 | ||||
Accounts Receivable, net | 430.1 | 410.9 | ||||||
Current Insurance Receivable - Asbestos | 20.5 | 20.5 | ||||||
Inventories, net | 401.6 | 369.7 | ||||||
Other Current Assets | 52.9 | 47.8 | ||||||
Total Current Assets | 1,240.3 | 1,195.2 | ||||||
Property, Plant and Equipment, net | 280.1 | 290.3 | ||||||
Long-Term Insurance Receivable - Asbestos | 113.1 | 126.8 | ||||||
Other Assets | 593.6 | 647.3 | ||||||
Goodwill | 1,175.6 | 1,191.3 | ||||||
Total Assets | $ | 3,402.7 | $ | 3,450.8 | ||||
LIABILITIES AND EQUITY | ||||||||
Current Liabilities | ||||||||
Notes Payable and Current Maturities of Long-Term Debt | $ | 97.7 | $ | 100.8 | ||||
Accounts Payable | 221.0 | 228.8 | ||||||
Current Asbestos Liability | 79.0 | 79.0 | ||||||
Accrued Liabilities | 242.5 | 225.8 | ||||||
Income Taxes | 12.1 | 5.6 | ||||||
Total Current Liabilities | 652.3 | 640.0 | ||||||
Long-Term Debt | 749.2 | 749.2 | ||||||
Long-Term Deferred Tax Liability | 41.6 | 46.3 | ||||||
Long-Term Asbestos Liability | 484.7 | 534.5 | ||||||
Other Liabilities | 364.5 | 410.1 | ||||||
Total Equity | 1,110.4 | 1,070.6 | ||||||
Total Liabilities and Equity | $ | 3,402.7 | $ | 3,450.8 | ||||
2
CRANE CO.
Condensed Statements of Cash Flows
(in millions)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Operating Activities: | ||||||||||||||||
Net income attributable to common shareholders | $ | 56.9 | $ | 28.1 | $ | 163.7 | $ | 136.5 | ||||||||
Noncontrolling interest in subsidiaries' earnings | 0.3 | 0.1 | 0.7 | 0.5 | ||||||||||||
Net income before allocations to noncontrolling interests | 57.2 | 28.2 | 164.4 | 137.0 | ||||||||||||
Environmental Provision | — | 55.8 | — | 55.8 | ||||||||||||
Restructuring - Non Cash | 0.1 | — | 1.5 | 1.0 | ||||||||||||
Depreciation and amortization | 16.5 | 18.0 | 49.9 | 58.0 | ||||||||||||
Stock-based compensation expense | 5.0 | 5.4 | 15.8 | 15.9 | ||||||||||||
Defined benefit plans and postretirement expense | (6.1 | ) | (2.9 | ) | (9.7 | ) | (8.8 | ) | ||||||||
Deferred income taxes | 15.4 | (7.0 | ) | 23.4 | 3.7 | |||||||||||
Cash provided by (used for) operating working capital | 8.1 | 7.1 | (46.6 | ) | (47.3 | ) | ||||||||||
Defined benefit plans and postretirement contributions | (7.3 | ) | (9.7 | ) | (15.4 | ) | (22.7 | ) | ||||||||
Environmental payments, net of reimbursements | (6.0 | ) | (3.9 | ) | (13.6 | ) | (8.6 | ) | ||||||||
Other | (1.9 | ) | (7.4 | ) | (17.8 | ) | (24.2 | ) | ||||||||
Subtotal | 81.1 | 83.6 | 151.9 | 159.6 | ||||||||||||
Asbestos related payments, net of insurance recoveries | (11.4 | ) | (15.4 | ) | (36.2 | ) | (46.2 | ) | ||||||||
Total provided by operating activities | 69.7 | 68.2 | 115.7 | 113.4 | ||||||||||||
Investing Activities: | ||||||||||||||||
Capital expenditures | (8.1 | ) | (11.5 | ) | (28.2 | ) | (32.2 | ) | ||||||||
Proceeds from disposition of capital assets | — | 3.9 | 1.9 | 5.0 | ||||||||||||
Proceeds from divestiture | — | — | — | 2.1 | ||||||||||||
Proceeds from acquisition | — | — | — | 6.1 | ||||||||||||
Total used for investing activities | (8.1 | ) | (7.6 | ) | (26.4 | ) | (19.0 | ) | ||||||||
Financing Activities: | ||||||||||||||||
Dividends paid | (19.2 | ) | (19.5 | ) | (57.4 | ) | (54.8 | ) | ||||||||
Reacquisition of shares on open market | — | — | (25.0 | ) | — | |||||||||||
Stock options exercised - net of shares reacquired | 0.3 | 0.9 | 7.3 | 8.7 | ||||||||||||
Excess tax benefit (shortfall) from stock-based compensation | — | 0.4 | (0.2 | ) | 7.9 | |||||||||||
Repayment of credit facility | — | (39.0 | ) | (100.0 | ) | (11.0 | ) | |||||||||
Proceeds from issuance (repayment) of commercial paper | (25.0 | ) | — | 97.0 | — | |||||||||||
Total used for financing activities | (43.8 | ) | (57.2 | ) | (78.3 | ) | (49.1 | ) | ||||||||
Effect of exchange rate on cash and cash equivalents | (8.8 | ) | (16.0 | ) | (22.1 | ) | (14.3 | ) | ||||||||
Increase (decrease) in cash and cash equivalents | 8.9 | (12.5 | ) | (11.1 | ) | 31.0 | ||||||||||
Cash and cash equivalents at beginning of period | 326.3 | 314.2 | 346.3 | 270.6 | ||||||||||||
Cash and cash equivalents at end of period | $ | 335.2 | $ | 301.7 | $ | 335.2 | $ | 301.7 | ||||||||
3
CRANE CO.
Order Backlog
(in millions)
September 30, 2015 | June 30, 2015 | March 31, 2015 | December 31, 2014 | September 30, 2014 | ||||||||||||||||
Fluid Handling | $ | 278.6 | $ | 287.3 | $ | 304.3 | $ | 311.1 | $ | 349.6 | ||||||||||
Payment & Merchandising Technologies | 55.5 | 61.1 | 68.1 | 68.3 | 58.8 | |||||||||||||||
Aerospace & Electronics | 459.9 | 448.1 | 446.1 | 422.1 | 404.8 | |||||||||||||||
Engineered Materials | 13.7 | 15.4 | 18.6 | 16.7 | 14.4 | |||||||||||||||
Total Backlog | $ | 807.8 | $ | 811.9 | $ | 837.2 | $ | 818.1 | $ | 827.7 | ||||||||||
4
CRANE CO.
Non-GAAP Financial Measures
(in millions, except per share data)
Three Months Ended September 30, | Nine Months Ended September 30, | Percent Change September 30, 2015 | Percent Change September 30, 2015 | ||||||||||||||||||
2015 | 2014 | 2015 | 2014 | Three Months | Nine Months | ||||||||||||||||
INCOME ITEMS | |||||||||||||||||||||
Net Sales | $ | 669.9 | $ | 727.4 | $ | 2,060.0 | $ | 2,194.3 | (7.9 | )% | (6.1 | )% | |||||||||
Operating Profit | 93.2 | 47.7 | 269.4 | 226.7 | 95.3 | % | 18.8 | % | |||||||||||||
Percentage of Sales | 13.9 | % | 6.6 | % | 13.1 | % | 10.3 | % | |||||||||||||
Special Items impacting Operating Profit: | |||||||||||||||||||||
MEI acquisition related inventory and backlog amortization | — | — | — | 4.8 | |||||||||||||||||
MEI acquisition related integration costs | 2.2 | 1.0 | 5.6 | 7.7 | |||||||||||||||||
MEI acquisition related restructuring costs | — | 0.1 | 0.2 | 5.7 | |||||||||||||||||
Repositioning charges | 2.0 | 3.4 | 11.7 | 11.6 | |||||||||||||||||
Lawsuit settlement charge | — | — | — | 6.5 | |||||||||||||||||
Environmental Provision | $ | — | $ | 55.8 | $ | — | $ | 55.8 | |||||||||||||
Operating Profit before Special Items | $ | 97.4 | $ | 108.0 | $ | 286.9 | $ | 318.8 | (9.8 | )% | (10.0 | )% | |||||||||
Percentage of Sales | 14.5 | % | 14.9 | % | 13.9 | % | 14.5 | % | |||||||||||||
Net Income Attributable to Common Shareholders | $ | 56.9 | $ | 28.1 | $ | 163.7 | $ | 136.5 | |||||||||||||
Per Share | $ | 0.97 | $ | 0.47 | $ | 2.78 | $ | 2.28 | 106.5 | % | 21.8 | % | |||||||||
Special Items impacting Net Income Attributable to Common Shareholders: | |||||||||||||||||||||
MEI acquisition related inventory and backlog amortization - Net of Tax | — | — | — | 3.0 | |||||||||||||||||
Per Share | $ | 0.05 | |||||||||||||||||||
MEI acquisition related integration charges - Net of Tax | 1.4 | 0.8 | 3.7 | 5.8 | |||||||||||||||||
Per Share | $ | 0.02 | $ | 0.01 | $ | 0.06 | $ | 0.10 | |||||||||||||
MEI acquisition related restructuring charges - Net of Tax | 0.2 | 0.1 | 0.3 | 3.8 | |||||||||||||||||
Per Share | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.06 | |||||||||||||
Repositioning charges - Net of Tax | 1.9 | 2.3 | 9.0 | 8.1 | |||||||||||||||||
Per Share | $ | 0.03 | $ | 0.04 | $ | 0.15 | $ | 0.13 | |||||||||||||
Lawsuit settlement charge - Net of Tax | — | — | — | 4.2 | |||||||||||||||||
Per Share | $ | — | $ | 0.07 | |||||||||||||||||
Environmental Provision - Net of Tax | — | 36.3 | — | 36.3 | |||||||||||||||||
Per Share | $ | 0.61 | $ | 0.61 | |||||||||||||||||
Loss on business divestiture - Net of Tax | — | — | — | 1.1 | |||||||||||||||||
Per Share | $ | 0.02 | |||||||||||||||||||
Gain on real estate divestiture - Net of Tax | — | (0.7 | ) | — | (0.7 | ) | |||||||||||||||
Per Share | $ | (0.01 | ) | $ | (0.01 | ) | |||||||||||||||
Net Income Attributable To Common Shareholders Before Special Items | $ | 60.3 | $ | 66.8 | $ | 176.7 | $ | 198.0 | (9.7 | )% | (10.8 | )% | |||||||||
Per Share | $ | 1.03 | $ | 1.12 | $ | 3.00 | $ | 3.31 | (8.0 | )% | (9.4 | )% | |||||||||
5
CRANE CO.
Guidance
(in millions, except per share data)
2015 Full Year Guidance | ||||||||
2015 Earnings Per Share Guidance | Low | High | ||||||
Earnings Per Share - GAAP basis | $ | 3.87 | $ | 3.97 | ||||
MEI acquisition related integration and restructuring costs - Net of Tax | 0.08 | 0.08 | ||||||
Repositioning actions - Net of Tax | 0.15 | 0.15 | ||||||
Earnings Per Share - Non-GAAP basis | $ | 4.10 | $ | 4.20 | ||||
Three Months Ended September 30, | Nine Months Ended September 30, | 2015 Full Year Guidance | ||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | Low | High | |||||||||||||||||||
CASH FLOW ITEMS | ||||||||||||||||||||||||
Cash Provided by Operating Activities | ||||||||||||||||||||||||
before Asbestos - Related Payments | $ | 81.1 | $ | 83.6 | $ | 151.9 | $ | 159.6 | $ | 298.5 | $ | 298.5 | ||||||||||||
Asbestos Related Payments, Net of Insurance Recoveries | (11.4 | ) | (15.4 | ) | (36.2 | ) | (46.2 | ) | (58.5 | ) | (48.5 | ) | ||||||||||||
Cash Provided by Operating Activities | 69.7 | 68.2 | 115.7 | 113.4 | 240.0 | 250.0 | ||||||||||||||||||
Less: Capital Expenditures | (8.1 | ) | (11.5 | ) | (28.2 | ) | (32.2 | ) | (50.0 | ) | (40.0 | ) | ||||||||||||
Free Cash Flow | $ | 61.5 | $ | 56.7 | $ | 87.4 | $ | 81.3 | $ | 190.0 | $ | 210.0 | ||||||||||||
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. | ||||||||||
6