Crane Co. (NYSE:CR), a diversified manufacturer of highly engineered industrial products, reported that third quarter 2012 earnings per diluted share from continuing operations on a GAAP basis increased 12% to $.97 compared to $.87 in the third quarter of 2011. Third quarter 2012 results include $.02 per share of repositioning costs associated with previously announced actions initiated in the second quarter to improve the profitability of the Company in 2013. Excluding repositioning costs, third quarter 2012 earnings per diluted share from continuing operations increased 14% to $.99 compared to $.87 in the third quarter of 2011. (Please see the attached Non-GAAP Financial Measures table for pre-tax, after-tax and earnings per share amounts of Special Items.)
Third quarter 2012 sales from continuing operations of $646 million were approximately equal to the third quarter of 2011, with a core sales increase of $13 million (2%), offset by unfavorable foreign currency translation of $14 million (-2%).
Third quarter 2012 operating profit from continuing operations on a GAAP basis (which includes the $1.4 million of repositioning costs) increased 8% to $86.6 million, compared to $80.3 million in the third quarter of 2011. Excluding repositioning costs, third quarter 2012 operating profit from continuing operations increased 10% to $87.9 million, and operating profit margin increased to 13.6%, compared to 12.4% in the third quarter of 2011. (Please see the attached Non-GAAP Financial Measures table.)
"Crane reported record earnings per share in the third quarter, with strong execution across the organization, and I am particularly pleased with the margin improvement we achieved in our Fluid Handling segment," said Crane Co. president and chief executive officer Eric C. Fast. "We are on track to complete our previously announced repositioning actions by year end, which will positively impact 2013 earnings. Given our cautious outlook on the global economy, we continue to drive productivity initiatives and a cost conscious culture across the Company."
Updated 2012 Guidance
Sales from continuing operations for 2012 are expected to increase approximately 4%, or at the low end of the prior sales guidance range of 4-5%. 2012 EPS is expected to be in the lower half of the previously communicated guidance range of $3.75 - $3.85, excluding Special Items. The EPS guidance includes $0.04 associated with the first half profits from discontinued operations, but excludes the gain from the sale of these businesses and repositioning costs. Full year 2012 free cash flow (cash provided by operating activities less capital spending) remains in a range of $150 - $180 million.
Cash Flow and Financial Position
Cash provided by operating activities in the third quarter of 2012 was $63.2 million, compared to $49.8 million in the third quarter of 2011. Cash provided by operating activities in the first nine months of 2012 was $79.3 million, compared to $65.0 million in the first nine months of 2011. Free cash flow for the nine months of 2012 was $59.3 million, compared to $37.3 million in the nine months of 2011. (Please see the Condensed Statement of Cash Flows and Non-GAAP table.)
The Company repurchased 499,267 shares of its common stock during the third quarter of 2012 at a cost of $20 million. The Company’s cash position was $281 million at September 30, 2012, as compared to $252 million at June 30, 2012 and $245 million at December 31, 2011.
Repositioning Actions
In the second quarter, the Company initiated repositioning actions primarily directed at improving the profitability of its European businesses. Following a pre-tax charge of $14.7 million recorded in the second quarter, the Company, as planned, incurred pre-tax repositioning costs of $1.4 million, or $0.9 million on an after-tax basis ($0.02 per share) in the third quarter of 2012. In addition to the amounts recorded thus far, the Company expects to incur additional pre-tax repositioning costs in the fourth quarter of 2012 of approximately $4 million, or $0.04 per share, primarily associated with equipment relocation and personnel costs in Fluid Handling. These repositioning actions are expected to be completed by year end. Pre-tax savings associated with all of these repositioning actions are expected to approximate $12 million annually for the Company beginning in 2013, of which $10 million relates to Fluid Handling.
Segment Results
All comparisons detailed in this section refer to continuing operations for the third quarter 2012 versus the third quarter 2011.
Aerospace & Electronics
| Third Quarter | Change | ||||||||||
| (dollars in millions) | 2012 | 2011 | |||||||||
| Sales | $171.4 | $172.2 | ($0.8) | (0%) | |||||||
| Operating Profit | $39.8 | $35.6 | $4.2 | 12% | |||||||
| Profit Margin | 23.2% | 20.7% | |||||||||
Third quarter 2012 sales were similar to year ago levels, reflecting flat Aerospace Group sales and a slight decline in Electronics Group revenue. Within the Aerospace Group, both OEM and aftermarket sales were approximately equal to the prior year. Segment operating profit of $39.8 million increased by $4.2 million, or 12%, primarily reflecting lower engineering spending, and operating margin improved to 23.2%.
Aerospace & Electronics order backlog was $393 million at September 30, 2012, as compared to $423 million at June 30, 2012 and $411 million at December 31, 2011.
Engineered Materials
| Third Quarter | Change | ||||||||
| (dollars in millions) | 2012 | 2011 | |||||||
| Sales | $57.0 | $53.1 | $3.9 | 7% | |||||
| Operating Profit | $7.2 | $5.9 | $1.3 | 22% | |||||
| Operating Profit, before Special Items* | $8.3 | $5.9 | $2.4 | 41% | |||||
| Profit Margin | 12.7% | 11.1% | |||||||
| Profit Margin, before Special Items* | 14.7% | 11.1% | |||||||
| * Repositioning charges primarily associated with the closure of a manufacturing facility. | |||||||||
Segment sales of $57.0 million increased $3.9 million, or 7%, compared to the third quarter of 2011, driven by higher sales to recreational vehicle customers. Operating profit before Special Items increased 41%, primarily reflecting the higher sales and effective cost controls.
As part of its repositioning actions, the Company closed a small manufacturing facility in England. Repositioning costs of $1.1 million on a pre-tax basis were incurred in the third quarter of 2012.
Merchandising Systems
| Third Quarter | Change | ||||||||||
| (dollars in millions) | 2012 | 2011 | |||||||||
| Sales | $92.5 | $98.8 | ($6.3) | (6%) | |||||||
| Operating Profit | $9.5 | $10.8 | ($1.3) | (12%) | |||||||
| Profit Margin | 10.3% | 11.0% | |||||||||
Merchandising Systems sales of $92.5 million decreased $6.3 million, or 6%, reflecting lower sales in Vending and, to a lesser extent, Payment Solutions. Operating profit decreased $1.3 million, reflecting deleverage of the lower sales.
Fluid Handling
| Third Quarter | Change | ||||||||
| (dollars in millions) | 2012 | 2011 | |||||||
| Sales | $303.1 | $299.1 | $4.0 | 1% | |||||
| Operating Profit | $42.9 | $39.9 | $3.0 | 8% | |||||
| Operating Profit, before Special Items* | $43.1 | $39.9 | $3.2 | 8% | |||||
| Profit Margin | 14.2% | 13.3% | |||||||
| Profit Margin, before Special Items* | 14.2% | 13.3% | |||||||
| * Repositioning charges primarily associated with transferring production to lower cost Company facilities. | |||||||||
Third quarter 2012 sales increased $4 million, or 1%, including a core sales increase of $15 million (5%), partially offset by unfavorable foreign currency translation of $11 million (-4%). Before Special Items, operating profit increased to $43.1 million and operating margin increased from 13.3% to 14.2%, reflecting better project execution, price increases, and improved productivity. Backlog was $331 million at September 30, 2012, compared to $335 million at June 30, 2012 and $314 million at December 31, 2011.
The Company’s repositioning actions are primarily focused on its European Fluid Handling operations, to reduce costs through headcount reductions and process improvements, principally at its Krombach operations in Kreuztal, Germany. In addition, as part of a continuing cost reduction strategy, certain manufacturing operations are being transferred from facilities in Germany to Company facilities in lower cost regions. Repositioning costs of $0.2 million on a pre-tax basis were recorded in the third quarter of 2012.
Controls
| Third Quarter | Change | ||||||||||
| (dollars in millions) | 2012 | 2011 | |||||||||
| Sales | $22.1 | $23.8 | ($1.8) | (7%) | |||||||
| Operating Profit | $2.8 | $3.8 | ($0.9) | (25%) | |||||||
| Profit Margin | 12.9% | 15.9% | |||||||||
Third quarter 2012 sales from continuing operations of $22.1 million decreased 7%. Operating profit decreased 25%, reflecting deleverage of the lower sales volume.
Additional Information
Please see the condensed financial statements and the Non-GAAP Financial Measures table attached to this press release for supporting details. Additional information with respect to the Company’s asbestos liability and related accounting provisions and cash requirements is set forth in the Current Report on Form 8-K filed with a copy of this press release.
Conference Call
Crane Co. has scheduled a conference call to discuss the third quarter financial results on Tuesday, October 23, 2012 at 10:00 A.M. (Eastern). All interested parties may listen to a live webcast of the call at http://www.craneco.com. An archived webcast will also be available to replay this conference call directly from the Company’s website.
Crane Co. is a diversified manufacturer of highly engineered industrial products. Founded in 1855, Crane provides products and solutions to customers in the aerospace, electronics, hydrocarbon processing, petrochemical, chemical, power generation, automated merchandising, transportation and other markets. The Company has five business segments: Aerospace & Electronics, Engineered Materials, Merchandising Systems, Fluid Handling, and Controls. Crane has approximately 11,000 employees in North America, South America, Europe, Asia and Australia. Crane Co. is traded on the New York Stock Exchange (NYSE:CR). For more information, visit www.craneco.com.
This press release may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements present management’s expectations, beliefs, plans and objectives regarding future financial performance, and assumptions or judgments concerning such performance. Any discussions contained in this press release, except to the extent that they contain historical facts, are forward-looking and accordingly involve estimates, assumptions, judgments and uncertainties. There are a number of factors that could cause actual results or outcomes to differ materially from those addressed in the forward-looking statements. Such factors are detailed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011 and subsequent reports filed with the Securities and Exchange Commission.
| CRANE CO. | |||||||||||||||
| Income Statement Data | |||||||||||||||
| (in thousands, except per share data) | |||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||||||||
| Net Sales: | |||||||||||||||
| Aerospace & Electronics | $ | 171,368 | $ | 172,216 | $ | 525,127 | $ | 505,690 | |||||||
| Engineered Materials | 56,956 | 53,101 | 169,603 | 175,034 | |||||||||||
| Merchandising Systems | 92,489 | 98,815 | 277,741 | 287,703 | |||||||||||
| Fluid Handling | 303,080 | 299,118 | 903,617 | 845,929 | |||||||||||
| Controls | 22,088 | 23,838 | 73,192 | 66,209 | |||||||||||
| Total Net Sales | $ | 645,981 | $ | 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 | ) | 3,262 | * | |||||||
| 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 | 4,343 | |||||||||||
| Gain from Sales of Discontinued Operations attributable to common shareholders (b) | 1,385 | - | 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 | ) | |||||||||
| 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. | |||||||||||||||
| CRANE CO. | ||||||
| Condensed Balance Sheets | ||||||
| (in thousands) | ||||||
| September 30, | December 31, | |||||
| 2012 | 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 | ||
| CRANE CO. | ||||||||||||||||
| Condensed Statements of Cash Flows | ||||||||||||||||
| (in thousands) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | 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 provided by (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 | ||||||||
| CRANE CO. | ||||||||||||||||
| Order Backlog | ||||||||||||||||
| (in thousands) | ||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||
| 2012 | 2012 | 2012 | 2011 | 2011 | ||||||||||||
| Aerospace & Electronics | $ | 392,862 | $ | 423,282 | $ | 437,822 | $ | 410,794 | $ | 409,284 | ||||||
| Engineered Materials | 11,357 | 13,884 | 11,129 | 11,110 | 9,879 | |||||||||||
| Merchandising Systems | 19,957 | 23,587 | 30,033 | 15,212 | 20,929 | |||||||||||
| Fluid Handling | 330,824 | 334,696 | 337,538 | * | 313,715 | * | 328,757 | * | ||||||||
| Controls | 17,296 | 16,187 | 29,770 | ** | 27,120 | ** | 32,145 | ** | ||||||||
| Total Backlog | $ | 772,296 | $ | 811,636 | $ | 846,292 | $ | 777,951 | $ | 800,994 | ||||||
| * 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. | ||||||||||||||||
| CRANE CO. | |||||||||||||||||||||||
| Non-GAAP Financial Measures | |||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | Percent Change | Percent Change | ||||||||||||||||||||
| September 30, | September 30, | September 30, 2012 | September 30, 2012 | ||||||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | Three Months | Nine Months | ||||||||||||||||||
INCOME ITEMS | |||||||||||||||||||||||
| Net Sales | $ | 645,981 | $ | 647,088 | $ | 1,949,280 | $ | 1,880,565 | -0.2 | % | 3.7 | % | |||||||||||
| Operating Profit from Continuing Operations | 86,584 | 80,290 | 234,258 | 230,576 | 7.8 | % | 1.6 | % | |||||||||||||||
| Percentage of Sales | 13.4 | % | 12.4 | % | 12.0 | % | 12.3 | % | |||||||||||||||
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. | |||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| September 30, | 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. | |||||||||||||||||||||||
Contacts:
Richard E. Koch, 203-363-7352
Director,
Investor Relations and Corporate Communications
www.craneco.com
