News Column

Crane Co. Reports Second Quarter Results; Increases Dividend 10%

July 28, 2014

Second Quarter 2014 Highlights:

  • Second quarter earnings per diluted share (EPS) of $1.00 increased 7% compared to 2013
  • Excluding Special Items, EPS of $1.15 increased 9% compared to 2013
  • Sales of $750 million increased 15.6% compared to 2013, with a core sales increase of 0.1%
  • Fluid Handling order backlog increased 7% compared to the prior year and increased 13% year-to-date, adjusted for a recent divestiture

    STAMFORD, Conn.--(BUSINESS WIRE)-- Crane Co. (NYSE:CR), a diversified manufacturer of highly engineered industrial products, reported second quarter 2014 earnings of $1.00 per diluted share, compared to $0.93 per share in the second quarter of 2013. Second quarter 2014 results included Special Items of $9.3 million in after-tax charges, or $0.15 per share. Second quarter 2013 results included Special Items of $7.3 million in after-tax charges, or $0.13 per share. Excluding these Special Items in both years, second quarter 2014 earnings per diluted share increased 9% to $1.15, compared to $1.06 in the second quarter of 2013. (Please see the attached Non-GAAP Financial Measures table for additional details.)

    Special Items in the second quarter of 2014 consisted of the following after-tax charges: $2.5 million, or $0.04 per share, related to the December 2013 acquisition of MEI; $1.4 million, or $0.02 per share, related to previously disclosed repositioning activities; $4.2 million, or $0.07 per share, related to the settlement of the previously disclosed environmental lawsuits by certain homeowners in Roseland, New Jersey; and $1.1 million, or $0.02 per share, related to the divestiture of a small business. Special Items in the second quarter of 2013 included transaction-related costs of $7.3 million, or $0.13 per share, related to the acquisition of MEI.

    Second quarter 2014 sales of $750.1 million increased $101.4 million, or 15.6%, compared to $648.7 million in the second quarter of 2013, resulting from a core sales increase of $0.6 million, or 0.1%; sales from acquisitions, net of divestitures, of $93.8 million, or 14.5%; and favorable foreign exchange of $6.9 million, or 1.1%.

    Operating profit in the second quarter increased 9.8% to $97.6 million, compared to $88.8 million in the second quarter of 2013. Excluding Special Items, second quarter operating profit increased 14.8% to $109.9 million, compared to $95.7 million in the second quarter of 2013. (Please see the attached Non-GAAP Financial Measures table.)

    “We are pleased to report second quarter EPS of $1.15, excluding Special Items,” said Crane Co. president and chief executive officer Max Mitchell. “We were encouraged by second quarter order activity and backlog growth, particularly at Fluid Handling, and we continue to expect stronger sales growth in the second half of 2014. We believe that we remain on track to achieve our 2014 objectives, and are reaffirming our previously issued 2014 full year guidance, excluding Special Items. The MEI integration and previously announced repositioning activities are progressing smoothly and position us for solid earnings growth in 2015 and 2016. Reflecting continuing confidence in our long-term outlook, we have increased our dividend for the fifth consecutive year.”

    Cash Flow and Other Financial Metrics

    Cash provided by operating activities for the second quarter of 2014 was $64.2 million, compared to $30.9 million in the second quarter of 2013. Cash provided by operating activities for the six months ended June 30, 2014 was $45.3 million, compared to $10.5 million in the six months ended June 30, 2013. Capital expenditures in the second quarter of 2014 were $11.3 million, compared to $6.6 million in the second quarter of 2013. The Company’s cash position was $314.2 million at June 30, 2014, compared to $270.6 million at December 31, 2013. Total debt was $903.0 million at June 30, 2014, compared to $875.0 million at December 31, 2013.

    Divestiture

    In June 2014, the Company divested a non-core Fluid Handling business. The $1.6 million pre-tax loss on the sale is included in the “Other income / expense” section of the accompanying income statement. The divested business generated sales of approximately $15 million in 2013.

    Segment Results

    All comparisons detailed in this section refer to operating results for the second quarter 2014 versus the second quarter 2013, excluding Special Items.

    Fluid Handling

         
    Second Quarter   Change
    (dollars in millions) 2014     2013    
     
    Sales $ 324.5 $ 333.8 ($9.3 ) -2.8 %
     
    Operating Profit $ 52.2 $ 54.2 ($2.0 ) -3.7 %
    Operating Profit, before Special Items* $ 52.7 $ 54.2 ($1.5 ) -2.7 %
     
    Profit Margin 16.1 % 16.2 %
    Profit Margin, before Special Items* 16.2 % 16.2 %
     
    *Excludes $0.5 million of repositioning charges in the second quarter of 2014


    Second quarter 2014 sales decreased $9.3 million, or -2.8%, which included a core sales decline of $10.8 million, or -3.2%, and a divestiture impact of $2.4 million, or -0.7%, partially offset by favorable foreign exchange of $4.0 million, or 1.2%. The core sales decline was driven primarily by unfavorable comparisons for nuclear project based services, although comparisons ease in the second half of this year. Operating margin was flat at 16.2% as continued productivity gains and lower pension expense offset lower volumes. Fluid Handling order backlog was $369 million at June 30, 2014; after adjusting for the impact of the divestiture, comparable backlog was $345 million at March 31, 2014, $328 million at December 31, 2013 and $346 million at June 30, 2013. The year-over-year and sequential increase in backlog was broad-based across the portfolio.

    Payment & Merchandising Technologies

           
    Second Quarter Change
    (dollars in millions) 2014     2013    
     
    Sales $ 184.6 $ 84.8 $ 99.8 117.6 %
     
    Operating Profit $ 18.6 $ 8.9 $ 9.8 110.2 %
    Operating Profit, before Special Items* $ 21.4 $ 8.9 $ 12.5 140.8 %
     
    Profit Margin 10.1 % 10.5 %
    Profit Margin, before Special Items* 11.6 % 10.5 %
     
    * Excludes $2.7 million of transaction- and integration-related expenses in the second quarter of 2014


    Sales of $184.6 million increased $99.8 million, or 117.6%, driven primarily by $96.2 million of sales related to the MEI transaction, core sales growth of $0.9 million, or 1.1%, and favorable foreign exchange of $2.7 million, or 3.1%. Operating profit increased to $21.4 million in the quarter, primarily reflecting the impact of the MEI acquisition.

    Aerospace & Electronics

                     
    Second Quarter Change
    (dollars in millions) 2014 2013
     
    Sales $ 177.6 $ 172.4 $ 5.2 3.0 %
     
    Operating Profit $ 35.9 $ 37.0 ($1.2 ) -3.1 %
    Operating Profit, before Special Items* $ 37.5 $ 37.0 $ 0.5 1.3 %
     
    Profit Margin 20.2 % 21.5 %
    Profit Margin, before Special Items* 21.1 % 21.5 %
     
    * Excludes $1.6 million of repositioning charges in the second quarter of 2014


    Second quarter 2014 sales increased $5.2 million, or 3.0%, reflecting a sales increase of $6.1 million, or 5.7%, in the Aerospace Group, and a sales decline of $0.9 million, or -1.3%, in the Electronics Group. The Aerospace Group sales increase primarily reflected stronger OEM sales activity.The decrease in Electronics Group sales was driven primarily by lower product shipments for defense applications. Operating profit increased $0.5 million, which included continuing higher levels of engineering spending and other program investments supporting new product development activities. Aerospace & Electronics order backlog was $397 million at June 30, 2014, compared to $361 million at December 31, 2013, and $403 million at June 30, 2013.

    Engineered Materials

             
    Second Quarter Change
    (dollars in millions) 2014     2013    
     
    Sales $ 63.4 $ 57.7 $ 5.7 9.8 %
     
    Operating Profit $ 9.8 $ 9.2 $ 0.6 6.5 %
     
    Profit Margin 15.4 % 15.9 %


    Sales of $63.4 million were 9.8% higher than the second quarter of 2013, driven by higher sales to recreational vehicle equipment manufacturers. Operating profit increased 6.5% to $9.8 million, primarily reflecting the impact of the higher sales, partially offset by negative product mix.

    2014 Guidance Excluding Special Items Reaffirmed

    The Company reaffirmed its 2014 guidance, excluding Special Items. Management continues to expect sales to approximate $3.0 billion, reflecting a core sales increase of 1% to 3% and earnings in a range of $4.55 - $4.75 per diluted share, excluding Special Items. Full year 2014 free cash flow (cash provided by operating activities less capital spending) is expected to be in a range of $225 to $250 million. (Please see the attached Non-GAAP Financial Measures table.)

    The Company revised its 2014 earnings guidance on a GAAP basis to a range of $4.18-$4.38 per diluted share, from a range of $4.28 - $4.48 per diluted share. The revision is driven solely by the new Special Items recorded in the second quarter; the revised GAAP EPS guidance includes previously disclosed Special Items, as well as a $1.1 million after-tax charge, or $0.02 per share, related to the divestiture, and a $4.2 million after-tax charge, or $0.07 per share, related to a lawsuit settlement.

    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 first quarter financial results on Tuesday, July 29, 2014 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. Slides that accompany the conference call will be available on 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 hydrocarbon processing, petrochemical, chemical, power generation, unattended payment, automated merchandising, aerospace, electronics, transportation and other markets. The Company has four business segments: Fluid Handling, Payment & Merchandising Technologies, Aerospace & Electronics and Engineered Materials. 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, 2013 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,
    2014 2013 2014 2013
    Net Sales:
    Fluid Handling $ 324,514 $ 333,776 $ 635,351 $ 646,774
    Payment & Merchandising Technologies 184,604 84,831 353,696 174,291
    Aerospace & Electronics 177,554 172,392 346,514 337,275
    Engineered Materials       63,424           57,747         131,365         117,977    
    Total Net Sales $       750,096     $       648,746     $     1,466,926     $     1,276,317    
     
    Operating Profit (Loss):
    Fluid Handling $ 52,200 $ 54,202 $ 96,701 $ 100,094
    Payment & Merchandising Technologies 18,644 8,868 26,091 19,033
    Aerospace & Electronics 35,885 37,041 68,442 77,152
    Engineered Materials 9,771 9,172 20,564 17,746
    Corporate *       (18,920)           (20,437)         (32,832)         (38,279)    
    Total Operating Profit 97,580 88,846 178,966 175,746
     
    Interest Income 365 519 753 1,151
    Interest Expense (9,764) (7,245) (19,573) (13,963)
    Miscellaneous- Net       (1,514)  

     

    **

     

    406         (1,718)  

     

    **

     

        286    
    Income Before Income Taxes 86,667

     

    82,526 158,428 163,220
    Provision for Income Taxes       26,758       27,112         49,647         49,864    
    Net income before allocation to noncontrolling interests 59,909 55,414 108,781 113,356
     
    Less: Noncontrolling interest in subsidiaries' earnings 212 540 400 691
                                               
    Net income attributable to common shareholders $       59,697     $       54,874     $     108,381     $     112,665    
     
    Share Data:
    Earnings per Diluted Share $ 1.00 $ 0.93 $ 1.82 $ 1.92
     
    Average Diluted Shares Outstanding 59,843 58,828 59,664 58,594
    Average Basic Shares Outstanding 58,883 57,908 58,682 57,684
     

    Supplemental Data:

    Cost of Sales $ 487,537 $ 426,025 $ 945,491 $ 835,844
    Selling, General & Administrative 159,174 127,022 317,110 254,986
    Repositioning Charges (see non-GAAP measures) 2,146 - 8,196 -
    Acquisition Related Charges (see non-GAAP measures) 3,659 6,853 17,163 9,741
    Depreciation and Amortization *** 18,158 13,014 39,933 25,724
    Stock-Based Compensation Expense 4,942 5,007 10,589 10,386
     

    *

     

    Corporate includes $6.5 million for a settlement of a lawsuit recorded in June 2014. Corporate also included acquisition related cost of $0.9 million and $6.9 million for the three months ended

    June 30, 2014 and 2013, respectively and $2.0 million and $9.7 million for the six months ended June 30, 2014 and 2013, respectively.

     

    **

    Includes $1.6 million pre-tax loss on sale of a small business divested in June 2014.

     

    ***

    Amount included within cost of sales and selling, general & administrative costs.

     
       
    CRANE CO.
    Condensed Balance Sheets
    (in thousands)
                             
    June 30, December 31,
    2014 2013
     
    ASSETS
    Current Assets
    Cash and Cash Equivalents $ 314,192 $ 270,643
    Accounts Receivable, net 467,497 437,541
    Current Insurance Receivable - Asbestos 22,783 22,783
    Inventories, net 401,510 368,886
    Other Current Assets     55,111         49,239    
    Total Current Assets 1,261,093 1,149,092
     
    Property, Plant and Equipment, net 305,681 305,055
    Long-Term Insurance Receivable - Asbestos 139,197 148,222
    Other Assets 679,468 707,922
    Goodwill     1,247,324         1,249,316    
     
    Total Assets $     3,632,763     $     3,559,607    
     
    LIABILITIES AND EQUITY
    Current Liabilities
    Notes Payable and Current Maturities of Long-Term Debt $ 153,806 $ 125,826
    Accounts Payable 237,549 229,828
    Current Asbestos Liability 88,038 88,038
    Accrued Liabilities 242,400 223,148
    Income Taxes     2,127         2,062    
    Total Current Liabilities 723,920 668,902
     
    Long-Term Debt 749,192 749,170
    Long-Term Deferred Tax Liability 51,683 76,041
    Long-Term Asbestos Liability 570,753 610,530
    Other Liabilities 211,488 240,291
     
    Total Equity     1,325,727         1,214,673    
     
    Total Liabilities and Equity $     3,632,763     $     3,559,607    
     
                                         
    CRANE CO.
    Condensed Statements of Cash Flows
    (in thousands)
     

    Three Months Ended

    Six Months Ended
    June 30, June 30,
    2014 2013 2014 2013
    Operating Activities:
    Net income attributable to common shareholders $   59,697 $   54,874 $   108,381 $   112,665
    Noncontrolling interest in subsidiaries' earnings     212       540       400       691  
    Net income before allocations to noncontrolling interests 59,909 55,414 108,781 113,356
    Restructuring - Non Cash 588 - 954 -
    Depreciation and amortization 18,158 13,014 39,933 25,724
    Stock-based compensation expense 4,942 5,007 10,589 10,386
    Defined benefit plans and postretirement expense (2,942 ) 1,416 (5,850 ) 2,359
    Deferred income taxes 5,904 1,447 10,642 9,647
    Cash provided by (used for) operating working capital 14,896 (15,884 ) (54,426 ) (114,418 )
    Defined benefit plans and postretirement contributions (8,257 ) (7,705 ) (13,018 ) (10,521 )
    Environmental payments, net of reimbursements (1,987 ) (1,970 ) (4,670 ) (5,475 )
    Other     (9,200 )     (1,344 )     (16,909 )     8,427  
    Subtotal 82,011 49,395 76,026 39,485
    Asbestos related payments, net of insurance recoveries     (17,827 )     (18,447 )     (30,752 )     (28,940 )
    Total provided by operating activities     64,184       30,948       45,274       10,545  
     
    Investing Activities:
    Capital expenditures (11,297 ) (6,566 ) (20,690 ) (12,039 )
    Proceeds from disposition of capital assets 834 91 1,065 287
    Proceeds from divestiture 2,081 - 2,081 -
    Proceeds from acquisition     6,100       -       6,100       -  
    Total used for investing activities     (2,282 )     (6,475 )     (11,444 )     (11,752 )
     
    Financing Activities:
    Dividends paid (17,677 ) (16,194 ) (35,293 ) (32,338 )
    Stock options exercised - net of shares reacquired 4,095 9,653 7,847 20,042
    Excess tax benefit from stock-based compensation 2,320 1,994 7,465 4,922
    Change in short-term debt     10,000       12,905       28,000       12,905  
    Total provided by (used for) financing activities     (1,262 )     8,358       8,019       5,531  
     
    Effect of exchange rate on cash and cash equivalents     3,278       3,448       1,700       (7,353 )
    Increase (decrease) in cash and cash equivalents 63,918 36,279 43,549 (3,029 )
    Cash and cash equivalents at beginning of period     250,274       384,639       270,643       423,947  
    Cash and cash equivalents at end of period $   314,192   $   420,918   $   314,192   $   420,918  
     
       
    CRANE CO.
    Order Backlog
    (in thousands)
                                       
    June 30, March 31, December 31, September 30, June 30,
    2014 2014 2013 2013 2013
     
    Fluid Handling * $     369,483 $     350,720 $     333,860 $     355,192 $     349,545
    Payment & Merchandising Technologies ** 69,857 58,787 51,888 23,901 25,641
    Aerospace & Electronics 396,835 397,541 361,323 381,830 403,400
    Engineered Materials       17,017       16,624       14,661       12,572       14,122
    Total Backlog $     853,192 $     823,672 $     761,732 $     773,495 $     792,708
     

    *

     

    Includes Order Backlog of $5.4 million at March 31, 2014, $5.5 million at December 31, 2013, $4.1 million at September 30, 2013 and $4.0 million at June 30, 2013 pertaining to a business divested in June 2014.

     

    **

    Includes $39.3 million, $37.0 million and $31.9 million of Order Backlog as of June 30, 2014, March 31, 2014 and December 31, 2013, respectively, pertaining to the MEI/Conlux business acquired in December 2013.

     
    CRANE CO.
    Non-GAAP Financial Measures
    (in thousands)
     

     

                                           

    INCOME ITEMS

    Three Months EndedSix Months EndedPercent ChangePercent Change

    June 30,

    June 30,   June 30, 2014   June 30, 2014  
    2014201320142013   Three Months   Six Months  
     
     
    Net Sales $     750,096 $     648,746 $     1,466,926 $     1,276,317 15.6 % 14.9 %
     
     
    Operating Profit 97,580 88,846 178,966 175,746 9.8 % 1.8 %
    Percentage of Sales13.0%13.7%12.2%13.8%
     

    Special Items impacting Operating Profit:

     
    Acquisition transaction costs (a) - 6,853 - 9,741
     
    Acquisition related inventory and backlog amortization (b) - - 4,790 -
     
    Acquistion related integration costs (c)

    2,030

    -

    6,755

    -
     
    Acquistion related restructuring costs (d)

    1,629

    -

    5,617

    -
     
    Repositioning charges (e) 2,146 - 8,196 -
     
    Lawsuit settlement charge (f)       6,500         -         6,500         -  
     
    Operating Profit before Special Items $     109,885   $     95,699   $     210,824   $     185,487   14.8 % 13.7 %
     
    Percentage of Sales14.6%14.8%14.4%14.5%
     
     
    Net Income Attributable to Common Shareholders $ 59,697 $ 54,874 $ 108,381 $ 112,665
    Per Share$1.00$0.93$1.82$1.92 6.9 % -5.5 %
     

    Special Items impacting Net Income Attributable to Common Shareholders:

     

     
    Acquisition transaction costs - Net of Tax (a) - 6,853 - 9,741
    Per Share$0.12$0.17
     
    Acquisition related inventory and backlog amortization - Net of Tax (b) - - 3,018 -
    Per Share$0.05
     
    Acquisition related integration costs - Net of Tax (c)

    1,626

    -

    4,835

    -
    Per Share$

    0.03

    $

    0.08

     
    Acquisition related restructuring costs - Net of Tax (d)

    914

    -

    3,894

    -
    Per Share$0.02$0.07
     
    Repositioning charges - Net of Tax (e) 1,446 - 5,776 -
    Per Share$0.02$0.10
     
    Lawsuit settlement charge - Net of Tax (f) 4,225 - 4,225 -
    Per Share$0.07$0.07
     
    Loss on business divestiture - Net of Tax (g) 1,055 - 1,055 -
    Per Share$0.020.02
     
    Withholding taxes related to acquisition funding (h) - 460 - 460
    Per Share   $     0.01     $     0.01  
     
    Net Income Attributable To Common Shareholders Before Special Items $ 68,963 $ 62,187 $ 131,184 $ 122,866 10.9 % 6.8 %
    Per Share$1.15$1.06$2.20$2.10 9.0 % 4.9 %
     
     

    (a)

    During the three and nine months ended June 30, 2013, the Company recorded transaction costs associated with the acquisition of MEI/Conlux.

     

    (b)

    During the three months ended March 31, 2014, the Company recorded inventory step-up and backlog amortization relating to the acquisition of MEI/Conlux.

     

    (c)

    During the three and six months ended June 30, 2014, the Company recorded integration costs associated with the acquisition of MEI/Conlux.

     

    (d)

    During the three and six months ended June 30, 2014, the Company recorded restructuring costs associated with the acquisition of MEI/Conlux.

     

    (e)

    During the three and six months ended June 30, 2014, the Company recorded repositioning charges associated with certain facility consolidation activities in our Fluid Handling and Aerospace & Electroncs segments. These charges primarily included severance and move costs related to the transfer of certain manufacturing operations.

     

    (f)

    During the three months ended June 30, 2014, the Company recorded a pre-tax $6.5 million charge related to the settlement of the previously disclosed environmental lawsuits by certain homeowners in Roseland, New Jersey.

     

    (g)

    During the three month ended June 30, 2014, the Company recorded a loss on the divestiture of a small business.

     

    (h)

    In the three months ended June 30, 2013, the Company incurred withholding taxes related to the cash marshalling activities supporting the acquisition of MEI.

     
                                       
          2014 Full Year Guidance    
     
    2014 Earnings Per Share GuidanceLowHigh
     
    Earnings Per Share - GAAP basis

    $

     

    4.18

    $

     

    4.38
     
    Acquisition integration costs, inventory step-up and backlog amortization - Net of Tax(i) 0.22 0.22
     
    Anticipated facility repositioning actions, net of real estate divestiture gains - Net of Tax (j) 0.05 0.05
     
    Lawsuit settlement charge - Net of Tax(f) 0.07 0.07
     
    Loss on business divestiture - Net of Tax (g) 0.02 0.02
                       
    Earnings Per Share - Non-GAAP basis

    $

       

     

    4.55  

    $

       

     

    4.75  
     

    (i)

     

    In connection with the MEI/Conlux acquisition, the Company expects to incur transaction and integration related costs, and inventory step up and backlog amortization charges in a range of $18 million

    to $21 million. The $0.22 represents the estimated Earnings Per Share impact for the mid-point of the $18 million to $21 million range.

     

    (j)

    In 2014, the Company expects to incur costs associated with facility repositioning actions related to the consolidation of certain smaller manufacturing sites and expects to record gains from the sale of certain Company owned real estate.

     
       

     

         

     

                         
     

    CASH FLOW ITEMS

    Three Months Ended

    Six Months Ended
    June 30,June 30,2014 Full Year Guidance
    2014201320142013LowHigh
    Cash Provided from Operating Activities
    before Asbestos - Related Payments $     82,011 $     49,395 $     76,026 $     39,485 $     345,000 $     354,000
    Asbestos Related Payments, Net of Insurance Recoveries       (17,827 )       (18,447 )       (30,752 )       (28,940 )       (70,000 )       (64,000 )
    Cash Provided from Operating Activities 64,184 30,948 45,274 10,545 275,000 290,000
    Less: Capital Expenditures       (11,297 )       (6,566 )       (20,690 )       (12,039 )   (50,000 )       (40,000 )
    Free Cash Flow $     52,887   $     24,382   $     24,584   $     (1,494 ) $     225,000   $     250,000  
     
    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.





    Crane Co.

    Jason D. Feldman, 203-363-7329

    Director, Investor Relations

    www.craneco.com

    Source: Crane Co.


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