Crane Co. (NYSE: CR), a diversified manufacturer of highly engineered industrial products, reported second quarter 2013 earnings of $0.93 per diluted share, compared to $1.07 in the second quarter of 2012. Second quarter 2013 results included transaction-related costs of $7.3 million, or $0.13 per share, related to the pending acquisition of MEI Conlux Holdings. Second quarter 2012 results included a $0.31 per share gain associated with divestitures, partially offset by $0.20 per share of repositioning charges. Excluding Special Items in both years, second quarter 2013 earnings per diluted share increased 10% to $1.06, compared to $0.96 in the second quarter of 2012. (Please see the attached Non-GAAP Financial Measures table.)
Second quarter 2013 sales of $648.7 million decreased $8.9 million, or 1.4%, compared to $657.7 million in the second quarter of 2012, resulting from a core sales decline of $5.9 million, or 0.9%, and unfavorable foreign exchange of $3.0 million, or 0.5%.
Operating profit in the second quarter increased 28.1% to $88.8 million, compared to $69.4 million in the second quarter of 2012. Excluding Special Items, second quarter operating profit increased 13.8% to $95.7 million, compared to $84.1 million in the second quarter of 2012, and operating profit margin increased to 14.8%, compared to 12.8% in the second quarter of 2012. (Please see the attached Non-GAAP Financial Measures table.)
“We are pleased to report second quarter EPS of $1.06 per share, excluding the MEI transaction costs,” said Crane Co. chief executive officer, Eric C. Fast. “On a slight decline in revenues, total Company operating margins expanded 200 basis points to a record 14.8%, led by solid execution in our Fluid Handling segment and strong productivity across the Company. Based on our expectation of record earnings this year and confidence in the future, we have increased our quarterly dividend by 7%. In connection with the pending acquisition of MEI, as previously reported, we are in negotiations with Bain Capital and Advantage Partners, the representatives of the owners of MEI, concerning the economic effects related to remedies required by the European Commission involving two Crane Payment Systems product lines.”
Updated 2013 Guidance
2013 EPS is now expected to be in a range of $4.10 to $4.25 per share, excluding Special Items, compared to the Company’s previous guidance range of $4.10 to $4.30 per share, reflecting lower than anticipated revenue growth. The 2013 guidance does not include potential impacts from the pending acquisition of MEI. Full year 2013 free cash flow is expected to be in a range of $190 to $220 million.
Cash Flow and Financial Position
Cash provided by operating activities in the second quarter of 2013 was $30.9 million, compared to $58.9 million in the second quarter of 2012. For the six months ended June 30, 2013, cash provided by operating activities was $10.5 million, compared to $16.1 million in 2012. The Company’s cash position was $420.9 million at June 30, 2013, compared to $423.9 million at December 31, 2012, and $252.3 million at June 30, 2012.
Segment Results
All comparisons detailed in this section refer to operating results for the second quarter 2013 versus the second quarter 2012. Beginning in the first quarter 2013, the operating results of the former Controls segment have been included in the Fluid Handling segment. Prior period amounts have been restated for comparative purposes.
Aerospace & Electronics | ||||||||||||||||||
| Second Quarter | Change | |||||||||||||||||
| (dollars in millions) | 2013 | 2012 | ||||||||||||||||
| Sales | $ | 172.4 | $ | 178.6 | ($6.2 | ) | -3 | % | ||||||||||
| Operating Profit | $ | 37.0 | $ | 38.9 | ($1.9 | ) | -5 | % | ||||||||||
| Profit Margin | 21.5 | % | 21.8 | % | ||||||||||||||
Second quarter 2013 sales decreased $6.2 million, or 3%, reflecting a $4.0 million decline (4%) in Aerospace Group sales and a decline of $2.2 million (3%) in Electronics Group sales. The Aerospace Group sales decrease reflected lower commercial spares activity and the completion of a military upgrade program in 2012. The decline in Electronics Group sales was primarily due to continued delays in defense-related programs. Segment operating profit decreased 5%, as higher operating profits in the Aerospace Group were more than offset by lower profits in the Electronics Group. Aerospace & Electronics order backlog was $403 million at June 30, 2013, compared to $378 million at December 31, 2012 and $423 million at June 30, 2012.
| Engineered Materials | ||||||||||||||||||
| Second Quarter | Change | |||||||||||||||||
| (dollars in millions) | 2013 | 2012 | ||||||||||||||||
| Sales | $ | 57.7 | $ | 54.5 | $ | 3.3 | 6 | % | ||||||||||
| Operating Profit | $ | 9.2 | $ | 5.5 | $ | 3.6 | 65 | % | ||||||||||
| Operating Profit, before Special Items* | $ | 9.2 | $ | 6.6 | $ | 2.6 | 39 | % | ||||||||||
| Profit Margin | 15.9 | % | 10.2 | % | ||||||||||||||
| Profit Margin, before Special Items* | 15.9 | % | 12.1 | % | ||||||||||||||
| *Repositioning charges in 2012 primarily associated with the closure of a manufacturing facility. | ||||||||||||||||||
Segment sales of $57.7 million were 6% higher than the second quarter of 2012, driven by higher sales to recreational vehicle equipment manufacturers. Excluding Special Items, operating profit increased 39% to $9.2 million, and margins increased from 12.1% to 15.9%, reflecting the impact of higher sales and savings associated with repositioning actions taken in 2012.
| Merchandising Systems | ||||||||||||||||||
| Second Quarter | Change | |||||||||||||||||
| (dollars in millions) | 2013 | 2012 | ||||||||||||||||
| Sales | $ | 84.8 | $ | 97.6 | ($12.7 | ) | -13 | % | ||||||||||
| Operating Profit | $ | 8.9 | $ | 9.1 | ($0.2 | ) | -3 | % | ||||||||||
| Operating Profit, before Special Items* | $ | 8.9 | $ | 11.4 | ($2.5 | ) | -22 | % | ||||||||||
| Profit Margin | 10.5 | % | 9.3 | % | ||||||||||||||
| Profit Margin, before Special Items* | 10.5 | % | 11.7 | % | ||||||||||||||
| * Repositioning charges in 2012 associated with optimizing manufacturing operations and a facility sale. | ||||||||||||||||||
Merchandising Systems sales of $84.8 million decreased $12.7 million, or 13%, with higher sales in Payment Solutions, more than offset by a decline in Vending Solutions. The significant decline in Vending Solutions sales and operating profit was the result of lower capital spending by certain bottler customers and continued weakness in Europe. Operating profit and margins increased in Payment Solutions, reflecting the impact of higher sales and continued productivity gains.
| Fluid Handling | ||||||||||||||||||
| Second Quarter | Change | |||||||||||||||||
| (dollars in millions) | 2013 | 2012 | ||||||||||||||||
| Sales | $ | 333.8 | $ | 327.0 | $ | 6.7 | 2 | % | ||||||||||
| Operating Profit | $ | 54.2 | $ | 30.6 | $ | 23.6 | 77 | % | ||||||||||
| Operating Profit, before Special Items* | $ | 54.2 | $ | 42.0 | $ | 12.2 | 29 | % | ||||||||||
| Profit Margin | 16.2 | % | 9.4 | % | ||||||||||||||
| Profit Margin, before Special Items* | 16.2 | % | 12.8 | % | ||||||||||||||
*Repositioning charges in 2012 primarily associated with transferring certain European production to lower cost Company facilities. | ||||||||||||||||||
Second quarter 2013 sales increased $6.7 million, or 2%, which included a core sales increase of $9.2 million (3%), and unfavorable foreign exchange of $2.5 million (1%). The sales increase reflected higher demand from chemical, energy and nuclear valve services customers. Excluding Special Items, segment operating margin increased from 12.8% to 16.2%, reflecting continued strong execution, productivity gains and savings associated with the repositioning actions taken in 2012. Fluid Handling order backlog was $350 million at June 30, 2013, compared to $343 million at December 31, 2012 and $351 million at June 30, 2012.
Additional Information
Please see 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 second quarter financial results on Tuesday, July 23, 2013 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 four business segments: Aerospace & Electronics, Engineered Materials, Merchandising Systems, and Fluid Handling. 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, 2012 and subsequent reports filed with the Securities and Exchange Commission.
(Financial Tables Follow)
CRANE CO. | ||||||||||||||||
| Income Statement Data | ||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Net Sales: | ||||||||||||||||
| Aerospace & Electronics | $ | 172,392 | $ | 178,591 | $ | 337,275 | $ | 353,759 | ||||||||
| Engineered Materials | 57,747 | 54,487 | 117,977 | 112,647 | ||||||||||||
| Merchandising Systems | 84,831 | 97,577 | 174,291 | 185,252 | ||||||||||||
| Fluid Handling | 333,776 | 327,031 | 646,774 | 651,641 | ||||||||||||
| Total Net Sales | $ | 648,746 | $ | 657,686 | $ | 1,276,317 | $ | 1,303,299 | ||||||||
| Operating Profit (Loss) from Continuing Operations: | ||||||||||||||||
| Aerospace & Electronics | $ | 37,041 | $ | 38,931 | $ | 77,152 | $ | 77,001 | ||||||||
| Engineered Materials | 9,172 | 5,543 | 17,746 | 13,952 | ||||||||||||
| Merchandising Systems | 8,868 | 9,115 | 19,033 | 13,828 | ||||||||||||
| Fluid Handling | 54,202 | 30,620 | 100,094 | 73,697 | ||||||||||||
| Corporate | (20,437) | (14,832) | (38,279) | (30,804) | ||||||||||||
| Total Operating Profit from Continuing Operations | 88,846 | 69,377 | 175,746 | 147,674 | ||||||||||||
| Interest Income | 519 | 454 | 1,151 | 849 | ||||||||||||
| Interest Expense | (7,245) | (6,785) | (13,963) | (13,496) | ||||||||||||
| Miscellaneous- Net | 406 | (351) | 286 | (698) | ||||||||||||
| Income from Continuing Operations Before Income Taxes | 82,526 | 62,695 | 163,220 | 134,329 | ||||||||||||
| Provision for Income Taxes | 27,112 | 19,857 | 49,864 | 40,518 | ||||||||||||
| Income from Continuing Operations | 55,414 | 42,838 | 113,356 | 93,811 | ||||||||||||
| Profit from Discontinued Operations attributable to common shareholders | - | 2,513 | - | 3,777 | ||||||||||||
| Gain from Sales of Discontinued Operations attributable to common shareholders | - | 28,060 | - | 28,060 | ||||||||||||
| Profit from Discontinued Operations attributable to common shareholders, net of tax | - | 1,633 | - | 2,456 | ||||||||||||
| Gain from Sales of Discontinued Operations attributable to common shareholders, net of tax | - | 18,276 | - | 18,276 | ||||||||||||
| Gain / Profit from Discontinued Operations, net of tax | - | 19,909 | - | 20,732 | ||||||||||||
| Net income before allocation to noncontrolling interests | 55,414 | 62,747 | 113,356 | 114,543 | ||||||||||||
| Less: Noncontrolling interest in subsidiaries' earnings | 540 | 185 | 691 | 319 | ||||||||||||
| Net income attributable to common shareholders | $ | 54,874 | $ | 62,562 | $ | 112,665 | $ | 114,224 | ||||||||
| Share Data: | ||||||||||||||||
| Earnings per share from Continuing Operations | $ | 0.93 | $ | 0.73 | $ | 1.92 | $ | 1.59 | ||||||||
| Earnings per share from Discontinued Operations | - | 0.34 | - | 0.35 | ||||||||||||
| Earnings per Diluted Share (a) | $ | 0.93 | $ | 1.07 | $ | 1.92 | $ | 1.95 | ||||||||
| Average Diluted Shares Outstanding | 58,828 | 58,614 | 58,594 | 58,704 | ||||||||||||
| Average Basic Shares Outstanding | 57,908 | 57,762 | 57,684 | 57,787 | ||||||||||||
Supplemental Data: | ||||||||||||||||
| Cost of Sales | $ | 426,025 | $ | 436,095 | $ | 835,844 | $ | 865,717 | ||||||||
| Selling, General & Administrative | 133,875 | 137,467 | 264,727 | 275,161 | ||||||||||||
| Repositioning Charges | - | 14,747 | - | 14,747 | ||||||||||||
| Depreciation and Amortization * | 13,014 | 15,274 | 25,724 | 29,948 | ||||||||||||
| Stock-Based Compensation Expense | 5,007 | 4,451 | 10,386 | 8,458 | ||||||||||||
| * Amount included within cost of sales and selling, general & administrative costs. | ||||||||||||||||
| (a) Earnings per share amounts may not add due to rounding | ||||||||||||||||
| CRANE CO. | |||||||||||
| Condensed Balance Sheets | |||||||||||
| (in thousands) | |||||||||||
June 30, | December 31, | ||||||||||
| 2013 | 2012 | ||||||||||
| ASSETS | |||||||||||
| Current Assets | |||||||||||
| Cash and Cash Equivalents | $ | 420,918 | $ | 423,947 | |||||||
| Accounts Receivable, net | 379,373 | 333,330 | |||||||||
| Current Insurance Receivable - Asbestos | 33,722 | 33,722 | |||||||||
| Inventories, net | 358,471 | 352,725 | |||||||||
| Other Current Assets | 38,669 | 36,797 | |||||||||
| Total Current Assets | 1,231,153 | 1,180,521 | |||||||||
| Property, Plant and Equipment, net | 257,793 | 268,283 | |||||||||
| Long-Term Insurance Receivable - Asbestos | 154,025 | 171,752 | |||||||||
| Other Assets | 426,982 | 455,530 | |||||||||
| Goodwill | 802,447 | 813,792 | |||||||||
| Total Assets | $ | 2,872,400 | $ | 2,889,878 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current Liabilities | |||||||||||
| Notes Payable and Current Maturities of Long-Term Debt | $ | 14,422 | $ | 1,123 | |||||||
| Accounts Payable | 168,191 | 182,731 | |||||||||
| Current Asbestos Liability | 91,670 | 91,670 | |||||||||
| Accrued Liabilities | 186,437 | 220,678 | |||||||||
| Income Taxes | 1,954 | 15,686 | |||||||||
| Total Current Liabilities | 462,674 | 511,888 | |||||||||
| Long-Term Debt | 399,181 | 399,092 | |||||||||
| Long-Term Deferred Tax Liability | 34,722 | 36,853 | |||||||||
| Long-Term Asbestos Liability | 657,528 | 704,195 | |||||||||
| Other Liabilities | 292,350 | 310,474 | |||||||||
| Total Equity | 1,025,945 | 927,376 | |||||||||
| Total Liabilities and Equity | $ | 2,872,400 | $ | 2,889,878 | |||||||
| CRANE CO. | ||||||||||||||||||||||
| Condensed Statements of Cash Flows | ||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
| Operating Activities: | ||||||||||||||||||||||
| Net income attributable to common shareholders | $ | 54,874 | $ | 62,562 | $ | 112,665 | $ | 114,224 | ||||||||||||||
| Noncontrolling interest in subsidiaries' earnings | 540 | 185 | 691 | 319 | ||||||||||||||||||
| Net income before allocations to noncontrolling interests | 55,414 | 62,747 | 113,356 | 114,543 | ||||||||||||||||||
| Gain on divestiture | - | (28,060 | ) | (28,060 | ) | |||||||||||||||||
| Restructuring - Non Cash | - | 2,761 | - | 2,761 | ||||||||||||||||||
| Depreciation and amortization | 13,014 | 15,274 | 25,724 | 29,948 | ||||||||||||||||||
| Stock-based compensation expense | 5,007 | 4,451 | 10,386 | 8,458 | ||||||||||||||||||
| Defined benefit plans and postretirement expense | 1,416 | 4,982 | 2,359 | 9,973 | ||||||||||||||||||
| Deferred income taxes | 1,447 | 7,199 | 9,647 | 15,743 | ||||||||||||||||||
| Cash provided by (used for) operating working capital | (15,884 | ) | 12,889 | (114,418 | ) | (90,614 | ) | |||||||||||||||
| Defined benefit plans and postretirement contributions | (7,705 | ) | (1,638 | ) | (10,521 | ) | (2,821 | ) | ||||||||||||||
| Environmental payments, net of reimbursements | (1,970 | ) | (4,724 | ) | (5,475 | ) | (7,303 | ) | ||||||||||||||
| Other | (1,344 | ) | 4,010 | 8,427 | 2,691 | |||||||||||||||||
| Subtotal | 49,395 | 79,891 | 39,485 | 55,319 | ||||||||||||||||||
| Asbestos related payments, net of insurance recoveries | (18,447 | ) | (20,982 | ) | (28,940 | ) | (39,217 | ) | ||||||||||||||
| Total provided by operating activities | 30,948 | 58,909 | 10,545 | 16,102 | ||||||||||||||||||
| Investing Activities: | ||||||||||||||||||||||
| Capital expenditures | (6,566 | ) | (6,615 | ) | (12,039 | ) | (13,780 | ) | ||||||||||||||
| Proceeds from disposition of capital assets | 91 | 1,686 | 287 | 1,858 | ||||||||||||||||||
| Payment for acquisition, net of cash acquired | - | - | - | - | ||||||||||||||||||
| Proceeds from divestiture | - | 52,665 | - | 52,665 | ||||||||||||||||||
| Total used for investing activities | (6,475 | ) | 47,736 | (11,752 | ) | 40,743 | ||||||||||||||||
| Financing Activities: | ||||||||||||||||||||||
| Dividends paid | (16,194 | ) | (14,985 | ) | (32,338 | ) | (30,075 | ) | ||||||||||||||
| Reacquisition of shares on open market | - | (29,991 | ) | - | (29,991 | ) | ||||||||||||||||
| Stock options exercised - net of shares reacquired | 9,653 | - | 20,042 | 8,426 | ||||||||||||||||||
| Excess tax benefit from stock-based compensation | 1,994 | 331 | 4,922 | 3,278 | ||||||||||||||||||
| Change in short-term debt | 12,905 | 318 | 12,905 | - | ||||||||||||||||||
Total provided by (used for) financing activities | 8,358 | (44,327 | ) | 5,531 | (48,362 | ) | ||||||||||||||||
| Effect of exchange rate on cash and cash equivalents | 3,448 | (5,879 | ) | (7,353 | ) | (1,273 | ) | |||||||||||||||
| Increase (decrease) in cash and cash equivalents | 36,279 | 56,439 | (3,029 | ) | 7,210 | |||||||||||||||||
| Cash and cash equivalents at beginning of period | 384,639 | 195,860 | 423,947 | 245,089 | ||||||||||||||||||
| Cash and cash equivalents at end of period | $ | 420,918 | $ | 252,299 | $ | 420,918 | $ | 252,299 | ||||||||||||||
| CRANE CO. | ||||||||||||||||||||
| Order Backlog | ||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
| 2013 | 2013 | 2012 | 2012 | 2012 | ||||||||||||||||
| Aerospace & Electronics | $ | 403,400 | $ | 397,518 | $ | 378,152 | $ | 392,862 | $ | 423,282 | ||||||||||
| Engineered Materials | 14,122 | 16,138 | 12,689 | 11,357 | 13,884 | |||||||||||||||
| Merchandising Systems | 25,641 | 21,399 | 14,686 | 19,957 | 23,587 | |||||||||||||||
| Fluid Handling | 349,545 | 365,231 | 343,370 | 348,120 | 350,883 | |||||||||||||||
| Total Backlog | $ | 792,708 | $ | 800,286 | $ | 748,897 | $ | 772,296 | $ | 811,636 | ||||||||||
| CRANE CO. | |||||||||||||||||||||||||
| Non-GAAP Financial Measures | |||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | Percent Change | Percent Change | ||||||||||||||||||||||
| June 30, | June 30, | June 30, 2013 | June 30, 2013 | ||||||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | Three Months | Six Months | ||||||||||||||||||||
INCOME ITEMS | |||||||||||||||||||||||||
| Net Sales | $ | 648,746 | $ | 657,686 | $ | 1,276,317 | $ | 1,303,299 | -1.4 | % | -2.1 | % | |||||||||||||
| Operating Profit from Continuing Operations | 88,846 | 69,377 | 175,746 | 147,674 | 28.1 | % | 19.0 | % | |||||||||||||||||
| Percentage of Sales | 13.7 | % | 10.5 | % | 13.8 | % | 11.3 | % | |||||||||||||||||
Special Items impacting Operating Profit from Continuing Operations: | |||||||||||||||||||||||||
| Non-deductible Acquisition Transaction Costs (a) | 6,853 | 9,741 | |||||||||||||||||||||||
| Repositioning Charges (b) | 14,747 | 14,747 | |||||||||||||||||||||||
| Operating Profit from Continuing Operations before Special Items | $ | 95,699 | $ | 84,124 | $ | 185,487 | $ | 162,421 | 13.8 | % | 14.2 | % | |||||||||||||
| Percentage of Sales | 14.8 | % | 12.8 | % | 14.5 | % | 12.5 | % | |||||||||||||||||
| Net Income Attributable to Common Shareholders | $ | 54,874 | $ | 62,562 | $ | 112,665 | $ | 114,224 | |||||||||||||||||
| Per Share | $ | 0.93 | $ | 1.07 | $ | 1.92 | $ | 1.95 | -12.6 | % | -1.2 | % | |||||||||||||
Special Items impacting Net Income Attributable to Common Shareholders: | |||||||||||||||||||||||||
| Non-deductible Acquisition Transaction Costs (a) | 6,853 | 9,741 | |||||||||||||||||||||||
| Per Share | 0.12 | 0.17 | |||||||||||||||||||||||
| Repositioning Charges - Net of Tax (b) | 11,880 | 11,880 | |||||||||||||||||||||||
| Per Share | 0.20 | 0.20 | |||||||||||||||||||||||
| Withholding taxes related to acquisition funding (c) | 460 | 460 | |||||||||||||||||||||||
| Per Share | 0.01 | 0.01 | |||||||||||||||||||||||
| Gain on Divestitures - Net of Tax (d) | (18,276 | ) | (18,276 | ) | |||||||||||||||||||||
| Per Share | (0.31 | ) | (0.31 | ) | |||||||||||||||||||||
| Net Income Attributable To Common Shareholders Before Special Items | $ | 62,187 | $ | 56,166 | $ | 122,866 | $ | 107,828 | 10.7 | % | 13.9 | % | |||||||||||||
| Per Diluted Share | $ | 1.06 | $ | 0.96 | $ | 2.10 | $ | 1.84 | 10.3 | % | 14.2 | % | |||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||
| Adjusted EBITDA Schedule (Non-GAAP) | |||||||||||||||||||||||||
| Net Income Attributable To Common Shareholders Before Special Items from Continuing Operations | $ | 62,187 | $ | 56,166 | $ | 122,866 | $ | 107,828 | |||||||||||||||||
| Interest, Net | 6,726 | 6,331 | 12,812 | 12,647 | |||||||||||||||||||||
| Provision for Income Taxes | 26,652 | 19,857 | 49,404 | 40,518 | |||||||||||||||||||||
| Depreciation and Amortization | 13,014 | 15,274 | 25,724 | 29,948 | |||||||||||||||||||||
| Stock Based Compensation | 5,007 | 4,451 | 10,386 | 8,458 | |||||||||||||||||||||
Adjusted EBITDA from Continuing Operations (Non-GAAP) | $ | 113,586 | $ | 102,079 | $ | 221,192 | $ | 199,400 | 11.3 | % | 10.9 | % | |||||||||||||
| (a) During the three and six months ended June 30, 2013, the Company recorded non-deductible transaction costs associated with the potential acquisition of MEI. | |||||||||||||||||||||||||
| (b) The Company incurred repositioning charges in the second 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. | |||||||||||||||||||||||||
| (c) In the three months ended June 30, 2013, the Company incurred withholding taxes related to the cash marshalling activities supporting the potential acquisition of MEI. | |||||||||||||||||||||||||
| (d) In June 2012, the Company divested of a business within the Fluid Handling segment and a business within the Controls segment. 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. | |||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||
CASH FLOW ITEMS | |||||||||||||||||||||||||
| Cash Provided from Operating Activities | |||||||||||||||||||||||||
| before Asbestos - Related Payments | $ | 49,395 | $ | 79,891 | $ | 39,485 | $ | 55,319 | |||||||||||||||||
| Asbestos Related Payments, Net of Insurance Recoveries | (18,447 | ) | (20,982 | ) | (28,940 | ) | (39,217 | ) | |||||||||||||||||
| Cash Provided from Operating Activities | 30,948 | 58,909 | 10,545 | 16,102 | |||||||||||||||||||||
| Less: Capital Expenditures | (6,566 | ) | (6,615 | ) | (12,039 | ) | (13,780 | ) | |||||||||||||||||
| Free Cash Flow | $ | 24,382 | $ | 52,294 | $ | (1,494 | ) | $ | 2,322 | ||||||||||||||||
| 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. | |||||||||||||||||||||||||
| The Company's definition of Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) is net income before special items plus an add-back for net interest, provision for income taxes, depreciation, amortization and stock-based compensation. Adjusted EBITDA is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because Adjusted EBITDA provides additional information with respect to the Company’s operating 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
