Share repurchases under the previously disclosed authorization may occur from time to time in open market transactions at prevailing prices or by other means in accordance with federal securities laws. The timing and amount of any repurchases will be determined by the Company’s management based on its evaluation of market conditions and other factors. There is no guarantee as to the number of shares that will be repurchased or the amount that will be spent on repurchases, and the repurchases may be extended, suspended, or discontinued at any time without prior notice at the Company’s discretion. This press release is neither an offer to sell, or the solicitation of an offer to purchase, any securities.
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.
Founded in 1855, Crane Co. provides products and solutions to customers in the chemicals, oil & gas, power, automated payment solutions, banknote design and production and aerospace & defense markets, along with a wide range of general industrial and consumer related end markets.
Crane Co. has scheduled a conference call to discuss the fourth quarter financial results on Tuesday, January 25, 2022 at 10:00 A.M. (Eastern). All interested parties may listen to a live webcast of the call at www.craneco.com. An archived webcast will also be available to replay this conference call directly from the Company’s website under Investors, Events & Presentations. 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 Co. provides products and solutions to customers in the chemicals, oil & gas, power, automated payment solutions, banknote design and production and aerospace & defense markets, along with a wide range of general industrial and consumer related end markets. The Company has four business segments: Aerospace & Electronics, Process Flow Technologies, Payment & Merchandising Technologies, and Engineered Materials. On May 24, 2021, Crane announced that it had signed an agreement to divest its Engineered Materials segment; that sale is pending, subject to customary closing conditions and regulatory approvals.
Crane Co. has approximately 11,000 employees in the Americas, Europe, the Middle East, Asia and Australia. Crane Co. is traded on the New York Stock Exchange (NYSE:CR).
This press release may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements are based on the management’s current beliefs, expectations, plans, assumptions and objectives regarding Crane Co.’s future financial performance and are subject to significant risks and uncertainties. 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, including risks and uncertainties related to the ongoing COVID-19 pandemic, that could cause actual results or outcomes to differ materially from those expressed or implied in these forward-looking statements.
Such factors also include, among others: uncertainties regarding the extent and duration of the impact of the COVID-19 pandemic on many aspects of our business, operations and financial performance; changes in economic, financial and end-market conditions in the markets in which we operate; fluctuations in raw material prices; inflationary pressures; supply chain disruptions; the financial condition of our customers and suppliers; economic, social and political instability, currency fluctuation and other risks of doing business outside of the United States; competitive pressures, including the need for technology improvement, successful new product development and introduction and any inability to pass increased costs of raw materials to customers; our ability to value and successfully integrate acquisitions, to realize synergies and opportunities for growth and innovation, and to attract and retain highly qualified personnel and key management; the risks that any regulatory approval that may be required for the Engineered Materials divestiture is delayed or is not obtained, that the Engineered Materials divestiture does not close or that the related transaction agreement is terminated, or that the benefits expected from the Engineered Materials divestiture will not be realized or will not be realized within the expected time period; a reduction in congressional appropriations that affect defense spending and our ability to predict the timing and award of substantial contracts in our banknote business; adverse effects on our business and results of operations, as a whole, as a result of increases in asbestos claims or the cost of defending and settling such claims; adverse effects as a result of environmental remediation activities, costs, liabilities and related claims; investment performance of our pension plan assets and fluctuations in interest rates, which may affect the amount and timing of future pension plan contributions; and other risks noted in reports that we file with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and subsequent reports filed with the Securities and Exchange Commission. Crane Co. does not undertake any obligation to update or revise any forward-looking statements.
For more information, visit
www.craneco.com
Income Statement Data (in millions, except per share data)
Net sales:
Aerospace & Electronics
$158.1
$143.4
$638.3
Process Flow Technologies
298.7
257.7
1,196.6
1,005.8
Payment & Merchandising Technologies
313.7
282.6
1,345.1
1,104.8
Total net sales
$770.5
$683.7
$3,180.0
$2,761.3
Operating profit:
$20.7
$12.9
$110.0
$100.7
41.5
23.7
182.5
97.7
60.1
31.7
307.5
100.6
Corporate
(35.2)
(14.4)
(97.7)
(58.8)
Total operating profit
$87.1
$53.9
$502.3
$240.2
Interest income
$0.3
$0.7
$1.4
Interest expense
(10.9)
(13.9)
Miscellaneous, net
Income from continuing operations before income taxes
Provision for income taxes
Net income from continuing operations before allocation to noncontrolling interests
Less: Noncontrolling interest in subsidiaries’ earnings
—
Net income from continuing operations attributable to common shareholders
Income from discontinued operations, net of tax 1
Net income attributable to common shareholders
Earnings per diluted share from continuing operations
Earnings per diluted share from discontinued operations
Earnings per diluted share
Average diluted shares outstanding
59.2
58.5
58.8
Average basic shares outstanding
58.1
58.4
58.3
Supplemental data:
Cost of sales
$482.5
Selling, general & administrative
200.9
Acquisition-related and integration charges 2
Transaction related expenses 2
Repositioning related (gains) charges, net 2
Depreciation and amortization 2
Stock-based compensation expense 2
1 The twelve-month period ended December 31, 2021 includes $20.6 million of deferred tax benefit associated with the pending disposition of the Engineered Materials segment. 2 Amounts included within Cost of sales and/or Selling, general & administrative costs.
Condensed Balance Sheets (in millions)
Assets
Current assets
Cash and cash equivalents
$478.6
$551.0
Accounts receivable, net
472.4
423.9
Current insurance receivable - asbestos
13.7
14.4
Inventories, net
440.9
429.7
Other current assets
118.1
137.3
Current assets held for sale
220.5
17.4
Total current assets
1,744.2
1,573.7
Property, plant and equipment, net
527.3
573.7
Long-term insurance receivable - asbestos
60.0
72.5
Other assets
742.6
757.5
Goodwill
1,412.5
1,437.7
Long-term assets held for sale
199.9
Total assets
$4,486.6
$4,615.0
Liabilities and equity
Current liabilities
Short-term borrowings
$—
Accounts payable
246.7
198.9
Current asbestos liability
62.3
66.5
Accrued liabilities
430.7
388.0
Income taxes
10.6
0.1
Current liabilities held for sale
44.9
27.4
Total current liabilities
795.2
1,056.6
Long-term debt
842.4
842.9
Long-term deferred tax liability
71.1
53.6
Long-term asbestos liability
549.8
603.6
Other liabilities
393.0
501.0
Long-term liabilities held for sale
26.2
Total equity
1,835.1
1,531.1
Total liabilities and equity
Condensed Statements of Cash Flows (in millions)
Operating activities from continuing operations:
$68.8
$42.5
$394.3
$163.1
Gain on sale of property
Depreciation and amortization
29.8
31.2
119.5
123.8
Stock-based compensation expense
6.2
Defined benefit plans and postretirement credit
(2.0)
Deferred income taxes
15.2
8.5
10.8
16.0
Cash provided by operating working capital
66.2
40.2
29.7
37.8
Defined benefit plans and postretirement contributions
(25.4)
Environmental payments, net of reimbursements
(1.3)
Asbestos related payments, net of insurance recoveries
(15.3)
Other
Total provided by operating activities from continuing operations
Payments for acquisitions, net of cash acquired
$(0.3)
$(169.5)
Proceeds from disposition of capital assets
0.4
0.6
23.6
4.4
Capital expenditures
(26.4)
(13.0)
(51.7)
(32.9)
Purchase of marketable securities
(30.0)
(10.0)
(90.0)
Proceeds from sale of marketable securities
Total (used for) provided by investing activities from continuing operation
$(26.0)
$17.3
Financing activities from continuing operations:
Dividends paid
$(25.1)
$(25.0)
$(100.6)
$(100.4)
Reacquisition of shares on open market
(96.3)
(70.0)
Stock options exercised, net of shares reacquired
4.3
0.9
14.2
5.1
Debt issuance costs
Proceeds from issuance of commercial paper with maturities greater than 90 days
251.3
Repayments of commercial paper with maturities greater than 90 days
(108.1)
(27.1)
(296.7)
Net repayments from issuance of commercial paper with maturities of 90 days or less
(76.8)
Proceeds from revolving credit facility
77.2
Repayments of revolving credit facility
(77.2)
Proceeds from term loan
343.9
Repayment of term loan
Total (used for) provided by financing activities from continuing operations
$(117.1)
$(132.2)
$(557.9)
$55.1
Discontinued operations:
Total provided by operating activities
$16.5
$14.5
Total used for investing activities
(0.8)
(0.5)
(2.2)
Increase in cash and cash equivalents from discontinued operations
15.7
14.0
24.3
Effect of exchange rate on cash and cash equivalents
0.2
20.4
(12.7)
21.6
Increase (decrease) in cash and cash equivalents
27.8
6.4
Cash and cash equivalents at beginning of period
450.8
544.6
Cash and cash equivalents at end of period
Order Backlog (in millions)
$459.8
$478.5
$472.9
$481.6
Total backlog
Our success reflects the dedication and commitment of our 11,000 associates who embody the best of Crane's strong culture.
Non-GAAP Financial Measures (in millions, except per share data)
Net sales (GAAP)
12.7%
Acquisition-related deferred revenue1
2.5
Net sales before special items (adjusted)
$686.2
Operating profit (GAAP)
Operating profit margin (GAAP)
11.3%
7.9%
Special items impacting operating profit:
Acquisition-related deferred revenue 1
Acquisition-related and integration charges
2.7
Transaction related expenses
6.8
Repositioning related (gains) charges, net
10.9
Operating profit before special items (adjusted)
$93.1
$70.0
33.0%
Operating profit margin before special items (adjusted)
12.1%
10.2%
Net income from continuing operations attributable to common shareholders (GAAP)
$1.16
Special items, net of tax, impacting net income from continuing operations attributable to common shareholders:
1.8
0.03
2.1
0.04
5.9
0.10
(0.6)
(0.01)
Pension curtailments and settlements
(0.1)
(0.7)
(0.02)
Net income from continuing operations, net of tax, attributable to common shareholders before special items (adjusted)
$74.0
$1.25
Special items impacting provision for income taxes from continuing operations:
Provision for income taxes (GAAP)
$11.0
$2.3
Tax effect of acquisition-related deferred revenue 1
0.7
Tax effect of acquisition-related and integration charges
Tax effect of transaction related expenses
Tax effect of repositioning related (gains) charges, net
(0.2)
2.4
Tax effect of impact of pension curtailments and settlements
Provision for income taxes before special items (adjusted)
1 Acquisition-related revenue that would otherwise be recognized but for the purchase accounting treatment of acquisitions. Totals may not sum due to rounding
15.2%
10.2
$2,771.5
14.7%
$10.2
12.9
8.2
(9.6)
36.8
$500.9
$300.1
66.9%
15.8%
10.8%
$6.66
7.5
0.13
9.9
7.0
0.12
(9.1)
0.47
(4.5)
$387.6
$6.55
$207.5
$82.9
$38.6
3.0
1.2
Tax effect of repositioning related (gains) charges, net 2
9.1
Tax effect of pension curtailments and settlements
Tax effect of gain on sale of property
(1.2)
1 Acquisition-related revenue that would otherwise be recognized but for the purchase accounting treatment of acquisitions. 2 Repositioning related charges in 2020 primarily consist of COVID-19 related severance and, to a lesser extent, acquisition-related repositioning and facility consolidation. Totals may not sum due to rounding
Non-GAAP Financial Measures by Segment (in millions)
$313.7
$41.5
$60.1
$(35.2)
13.1%
13.9%
$6.8
Repositioning related charges (gains), net
1.3
(2.1)
$
20.7
$257.7
$285.1
$23.7
9.0%
9.2%
11.2%
$2.5
1.4
Repositioning related charges, net
1.9
$14.8
$27.7
$1,196.6
$1,345.1
£110.0
$182.5
$307.5
17.2%
22.9%
$8.2
Repositioning related gains, net
(5.9)
(3.7)
$650.7
$1,005.8
$1,115.0
$ 2,771.5
$97.7
$100.6
$(58.8)
15.5%
9.1%
6.3
Repositioning related charges, net 2
6.5
10.5
19.8
$107.2
$114.5
$137.1
Full Year Guidance (in millions, except per share data)
Earnings from continuing operations per diluted share (GAAP)
$6.85
$7.25
Special items impacting earnings per share
0.15
Earnings from continuing operations per diluted share before special items (adjusted)
Cash provided by operating activities before asbestos-related payments
$170.3
$94.2
$315.2
$495.0
Asbestos-related payments, net of insurance recoveries
(7.3)
(44.9)
(31.1)
(45.0)
Cash provided by operating activities
155.0
86.9
466.7
284.1
410.0
Less: Capital expenditures
(60.0)
Free cash flow
The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). Certain non-GAAP measures are provided in this press release. 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. Specifically, management believes that, when considered together with reported amounts, these non-GAAP measures are useful to investors and management in understanding ongoing operations and by providing a clearer view of the underlying trends of the business. In addition, Free Cash Flow provides supplemental information to assist investors and management 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. Management uses non-GAAP financial measures in evaluating the Company's core operating results and financial performance. Non-GAAP financial measures, which may be inconsistent with similarly captioned measures presented by other companies, should be viewed as a supplement to, and not as a substitute for or superior to, the Company’s reported results prepared in accordance with GAAP. Reconciliations of the Company’s non-GAAP financial measures to the most directly comparable GAAP results are included in the tables at the end of this press release.
Vice President, Investor Relations 203-363-7329 www.craneco.com
Source: Crane Co.
