UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Mark One:
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended June 30, 2004
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Transition Period from to
Commission File Number: 1-1657
CRANE CO.
(Exact name of registrant as specified in its charter)
| Delaware | 13-1952290 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| 100 First Stamford Place, Stamford, CT | 06902 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (203-363-7300)
(Not Applicable)
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
The number of shares outstanding of the issuer’s classes of common stock, as of July 23, 2004
Common stock, $1.00 Par Value – 58,999,127 shares
Part I - Financial Information
Item 1. Financial Statements
Crane Co. and Subsidiaries
Consolidated Statements of Operations
(In Thousands)
(Unaudited)
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
|||||||||||||
| Net sales |
$ | 479,107 | $ | 405,973 | $ | 927,412 | $ | 782,443 | ||||||||
| Operating costs and expenses: |
||||||||||||||||
| Cost of sales |
324,348 | 274,357 | 630,274 | 531,631 | ||||||||||||
| Selling, general and |
||||||||||||||||
| administrative |
104,004 | 88,705 | 207,706 | 179,722 | ||||||||||||
| Operating profit |
50,755 | 42,911 | 89,432 | 71,090 | ||||||||||||
| Other income (expense): |
||||||||||||||||
| Interest income |
167 | 309 | 389 | 498 | ||||||||||||
| Interest expense |
(5,687 | ) | (4,141 | ) | (12,228 | ) | (8,084 | ) | ||||||||
| Miscellaneous - net |
37 | (833 | ) | (181 | ) | (998 | ) | |||||||||
| (5,483 | ) | (4,665 | ) | (12,020 | ) | (8,584 | ) | |||||||||
| Income before income taxes |
45,272 | 38,246 | 77,412 | 62,506 | ||||||||||||
| Provision for income taxes |
14,034 | 12,239 | 23,998 | 20,002 | ||||||||||||
| Net income |
$ | 31,238 | $ | 26,007 | $ | 53,414 | $ | 42,504 | ||||||||
| Basic net income per share: |
||||||||||||||||
| Net income |
$ | 0.53 | $ | 0.44 | $ | 0.90 | $ | 0.72 | ||||||||
| Diluted net income per share: |
||||||||||||||||
| Net income |
$ | 0.52 | $ | 0.44 | $ | 0.89 | $ | 0.72 | ||||||||
| Average basic shares outstanding |
59,214 | 59,287 | 59,395 | 59,349 | ||||||||||||
| Average diluted shares outstanding |
60,042 | 59,394 | 60,240 | 59,437 | ||||||||||||
| Dividends per share |
$ | 0.10 | $ | 0.10 | $ | 0.20 | $ | 0.20 | ||||||||
See Notes to Consolidated Financial Statements
2
Part I - Financial Information
Item 1. Financial Statements
Crane Co. and Subsidiaries
Consolidated Balance Sheets
(In Thousands)
(Unaudited)
| June 30, 2004 |
December 31, 2003 | |||||
| Assets |
||||||
| Current Assets |
||||||
| Cash and Cash Equivalents |
$ | 38,343 | $ | 142,518 | ||
| Accounts Receivable |
298,268 | 248,492 | ||||
| Inventories: |
||||||
| Finished goods |
85,293 | 80,017 | ||||
| Finished parts and subassemblies |
53,834 | 48,725 | ||||
| Work in process |
46,011 | 33,057 | ||||
| Raw materials |
77,866 | 73,632 | ||||
| 263,004 | 235,431 | |||||
| Other Current Assets |
32,280 | 35,335 | ||||
| Total Current Assets |
631,895 | 661,776 | ||||
| Property, Plant and Equipment: |
||||||
| Cost |
768,499 | 765,269 | ||||
| Less accumulated depreciation |
476,419 | 462,631 | ||||
| 292,080 | 302,638 | |||||
| Other Assets |
247,494 | 254,398 | ||||
| Intangible Assets |
69,762 | 56,725 | ||||
| Goodwill |
568,157 | 536,239 | ||||
| Total Assets |
$ | 1,809,388 | $ | 1,811,776 | ||
See Notes to Consolidated Financial Statements
3
Part I - Financial Information
Item 1. Financial Statements
Crane Co. and Subsidiaries
Consolidated Balance Sheets
(In Thousands)
(Unaudited)
| June 30, 2004 |
December 31, 2003 |
|||||||
| Liabilities and Shareholders’ Equity |
||||||||
| Current Liabilities |
||||||||
| Current maturities of long-term debt |
$ | 8 | $ | 100,275 | ||||
| Loans payable |
73,816 | — | ||||||
| Accounts payable |
146,094 | 116,885 | ||||||
| Accrued liabilities |
174,650 | 171,438 | ||||||
| U.S. and foreign taxes on income |
37,901 | 29,976 | ||||||
| Total Current Liabilities |
432,469 | 418,574 | ||||||
| Long-Term Debt |
296,266 | 295,861 | ||||||
| Accrued Pension and Postretirement Benefits |
39,508 | 39,742 | ||||||
| Deferred Tax Liability |
58,596 | 57,738 | ||||||
| Other Liabilities |
193,469 | 213,610 | ||||||
| Preferred Shares, par value $.01; 5,000,000 shares authorized |
— | — | ||||||
| Common Shareholders’ Equity: |
||||||||
| Common stock, par value $1.00; 200,000,000 shares authorized, 72,426,139 shares issued. |
72,426 | 72,426 | ||||||
| Capital surplus |
108,076 | 108,095 | ||||||
| Retained earnings |
874,332 | 838,678 | ||||||
| Accumulated other comprehensive income |
45,605 | 51,034 | ||||||
| Common stock held in treasury |
(311,359 | ) | (283,982 | ) | ||||
| Total Common Shareholders’ Equity |
789,080 | 786,251 | ||||||
| Total Liabilities and Shareholders’ Equity |
$ | 1,809,388 | $ | 1,811,776 | ||||
| Common Stock Issued |
72,426 | 72,426 | ||||||
| Less: Common Stock held in Treasury |
(13,433 | ) | (12,750 | ) | ||||
| Common Stock Outstanding |
58,993 | 59,676 | ||||||
See Notes to Consolidated Financial Statements
4
Part I - Financial Information
Item 1. Financial Statements
Crane Co. and Subsidiaries
Consolidated Statements of Cash Flows
(In Thousands)
(Unaudited)
| Six Months Ended June 30, |
||||||||
| 2004 |
2003 |
|||||||
| Operating activities: |
||||||||
| Net income |
$ | 53,414 | $ | 42,504 | ||||
| Income from joint venture |
(1,668 | ) | (1,535 | ) | ||||
| Depreciation and amortization |
28,629 | 25,212 | ||||||
| Deferred income taxes |
(303 | ) | (491 | ) | ||||
| Asbestos-related payments |
(6,190 | ) | (2,273 | ) | ||||
| Cash used for operating working capital |
(37,106 | ) | (5,757 | ) | ||||
| Other |
(6,412 | ) | (4,082 | ) | ||||
| Total provided from operating activities |
30,364 | 53,578 | ||||||
| Investing activities: |
||||||||
| Capital expenditures |
(10,902 | ) | (13,090 | ) | ||||
| Payments for acquisitions |
(50,630 | ) | (168,818 | ) | ||||
| Proceeds from divestitures |
— | 1,600 | ||||||
| Proceeds from disposition of capital assets |
795 | 911 | ||||||
| Total used for investing activities |
(60,737 | ) | (179,397 | ) | ||||
| Financing activities: |
||||||||
| Equity: |
||||||||
| Dividends paid |
(11,868 | ) | (11,874 | ) | ||||
| Settlement of shares-open market |
(42,748 | ) | (6,641 | ) | ||||
| Settlement of shares-stock incentive programs |
(1,820 | ) | (763 | ) | ||||
| Stock options exercised |
11,000 | 1,310 | ||||||
| Net equity |
(45,436 | ) | (17,968 | ) | ||||
| Debt: |
||||||||
| Issuance of long-term debt |
— | 166,113 | ||||||
| Repayments of long-term debt |
(100,306 | ) | (4,339 | ) | ||||
| Net increase (decrease) in short-term debt |
72,552 | (24,062 | ) | |||||
| Net debt |
(27,754 | ) | 137,712 | |||||
| Total (used for) provided from financing activities |
(73,190 | ) | 119,744 | |||||
| Effect of exchange rates on cash and cash equivalents |
(612 | ) | 1,544 | |||||
| Decrease in cash and cash equivalents |
(104,175 | ) | (4,531 | ) | ||||
| Cash and cash equivalents at beginning of period |
142,518 | 36,589 | ||||||
| Cash and cash equivalents at end of period |
$ | 38,343 | $ | 32,058 | ||||
| Detail of Cash Provided from Operating Activities Working Capital: |
||||||||
| Accounts receivable |
$ | (46,135 | ) | $ | (18,357 | ) | ||
| Inventories |
(17,380 | ) | 4,236 | |||||
| Other current assets |
2,309 | 1,342 | ||||||
| Accounts payable |
22,747 | 5,739 | ||||||
| Accrued liabilities |
(6,632 | ) | (771 | ) | ||||
| U.S. and foreign taxes on income |
7,985 | 2,054 | ||||||
| Total |
$ | (37,106 | ) | |||||