Attached files
| file | filename |
|---|---|
| 8-K - 8-K - CRANE CO /DE/ | d287152d8k.htm |
| EX-99.1 - EARNINGS PRESS RELEASE - CRANE CO /DE/ | d287152dex991.htm |
Exhibit 99.2
CRANE CO.
Income Statement Data
(in thousands, except per share data)
| Three Months Ended December 31, |
Twelve Months Ended December 31, |
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| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Net Sales: |
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| Aerospace & Electronics |
$ | 171,973 | $ | 161,059 | $ | 677,663 | $ | 577,164 | ||||||||
| Engineered Materials |
45,037 | 44,975 | 220,071 | 212,280 | ||||||||||||
| Merchandising Systems |
86,204 | 76,143 | 373,907 | 298,040 | ||||||||||||
| Fluid Handling |
297,475 | 261,719 | 1,154,135 | 1,019,937 | ||||||||||||
| Controls |
30,929 | 30,110 | 120,091 | 110,404 | ||||||||||||
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| Total Net Sales |
$ | 631,618 | $ | 574,006 | $ | 2,545,867 | $ | 2,217,825 | ||||||||
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| Operating Profit (Loss): |
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| Aerospace & Electronics |
$ | 38,785 | $ | 33,156 | $ | 145,624 | $ | 109,228 | ||||||||
| Engineered Materials |
4,562 | 3,466 | 29,754 | 30,143 | ||||||||||||
| Merchandising Systems |
7,705 | (2,611 | ) | 30,337 | 16,729 | |||||||||||
| Fluid Handling |
38,804 | 29,252 | 152,066 | 122,590 | ||||||||||||
| Controls |
3,211 | 2,943 | 14,658 | 5,843 | ||||||||||||
| Corporate |
(13,748 | ) | (12,507 | ) | (58,201 | ) | (49,371 | ) | ||||||||
| Asbestos Provision |
(241,647 | ) | — | (241,647 | ) | — | ||||||||||
| Environmental Provision |
(30,327 | ) | — | (30,327 | ) | — | ||||||||||
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| Total Operating Profit (Loss) |
(192,655 | ) | 53,699 | 42,264 | 235,162 | |||||||||||
| Interest Income |
514 | 424 | 1,635 | 1,184 | ||||||||||||
| Interest Expense |
(6,730 | ) | (6,720 | ) | (26,255 | ) | (26,841 | ) | ||||||||
| Miscellaneous- Net |
(452 | ) | 527 | 2,810 | * | 1,424 | ||||||||||
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| Income (Loss) Before Income Taxes |
(199,323 | ) | 47,930 | 20,454 | 210,929 | |||||||||||
| Provision (Benefit) for Income Taxes |
(74,518 | ) | 8,690 | (6,062 | ) | 56,739 | ||||||||||
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| Net income (loss) before allocations to noncontrolling interests |
(124,805 | ) | 39,240 | 26,516 | 154,190 | |||||||||||
| Less: Noncontrolling interest in subsidiaries’ earnings (losses) |
324 | (148 | ) | 201 | 20 | |||||||||||
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| Net income (loss) attributable to common shareholders |
$ | (125,129 | ) | $ | 39,388 | $ | 26,315 | $ | 154,170 | |||||||
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| Share Data: |
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| Earnings (Loss) per Diluted Share |
$ | (2.16 | ) | $ | 0.66 | $ | 0.44 | $ | 2.59 | |||||||
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| Average Diluted Shares Outstanding |
57,903 | 59,317 | 59,204 | 59,562 | ||||||||||||
| Average Basic Shares Outstanding |
57,903 | 58,275 | 58,120 | 58,601 | ||||||||||||
| Supplemental Data: |
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| Cost of Sales |
$ | 425,765 | $ | 385,381 | $ | 1,683,093 | $ | 1,472,602 | ||||||||
| Asbestos Provision |
241,647 | — | 241,647 | — | ||||||||||||
| Environmental Provision |
30,327 | — | 30,327 | — | ||||||||||||
| Selling, General & Administrative |
126,534 | 134,926 | 548,536 | 510,061 | ||||||||||||
| Depreciation and Amortization ** |
15,735 | 15,245 | 62,943 | 59,841 | ||||||||||||
| Stock-Based Compensation Expense |
3,840 | 3,676 | 14,972 | 13,326 | ||||||||||||
| * | 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. |
CRANE CO.
Condensed Balance Sheets
(in thousands)
| December 31, 2011 |
December 31, 2010 |
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| ASSETS |
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| Current Assets |
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| Cash and Cash Equivalents |
$ | 245,089 | $ | 272,941 | ||||
| Accounts Receivable, net |
349,250 | 301,918 | ||||||
| Current Insurance Receivable - Asbestos |
16,345 | 33,000 | ||||||
| Inventories, net |
360,689 | 319,077 | ||||||
| Other Current Assets |
60,859 | 61,725 | ||||||
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| Total Current Assets |
1,032,232 | 988,661 | ||||||
| Property, Plant and Equipment, net |
284,146 | 280,746 | ||||||
| Long-Term Insurance Receivable - Asbestos |
208,952 | 180,689 | ||||||
| Other Assets |
497,377 | 446,316 | ||||||
| Goodwill |
820,824 | 810,285 | ||||||
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| Total Assets |
$ | 2,843,531 | $ | 2,706,697 | ||||
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| LIABILITIES AND EQUITY |
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| Current Liabilities |
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| Notes Payable and Current Maturities of Long-Term Debt |
$ | 1,112 | $ | 984 | ||||
| Accounts Payable |
194,158 | 157,051 | ||||||
| Current Asbestos Liability |
100,943 | 100,000 | ||||||
| Accrued Liabilities |
226,717 | 229,462 | ||||||
| Income Taxes |
10,165 | 11,057 | ||||||
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| Total Current Liabilities |
533,095 | 498,554 | ||||||
| Long-Term Debt |
398,914 | 398,736 | ||||||
| Long-Term Deferred Tax Liability |
41,668 | 48,852 | ||||||
| Long-Term Asbestos Liability |
792,701 | 619,666 | ||||||
| Other Liabilities |
255,097 | 147,859 | ||||||
| Total Equity |
822,056 | 993,030 | ||||||
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| Total Liabilities and Equity |
$ | 2,843,531 | $ | 2,706,697 | ||||
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CRANE CO.
Condensed Statements of Cash Flows
(in thousands)
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Operating Activities: |
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| Net income (loss) attributable to common shareholders |
$ | (125,129 | ) | $ | 39,388 | $ | 26,315 | $ | 154,170 | |||||||
| Noncontrolling interest in subsidiaries’ earnings (losses) |
324 | (148 | ) | 201 | 20 | |||||||||||
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| Net income (loss) before allocations to noncontrolling interests |
(124,805 | ) | 39,240 | 26,516 | 154,190 | |||||||||||
| Asbestos provision, net |
241,647 | — | 241,647 | — | ||||||||||||
| Environmental provision, net |
30,327 | — | 30,327 | — | ||||||||||||
| Gain on divestiture |
— | — | (4,258 | ) | (1,015 | ) | ||||||||||
| Depreciation and amortization |
15,735 | 15,245 | 62,943 | 59,841 | ||||||||||||
| Stock-based compensation expense |
3,840 | 3,676 | 14,972 | 13,326 | ||||||||||||
| Defined benefit plans and postretirement expense |
1,959 | 5,485 | 7,362 | 14,712 | ||||||||||||
| Deferred income taxes |
(66,574 | ) | 540 | (44,835 | ) | 31,453 | ||||||||||
| Cash provided by (used for) operating working capital |
34,957 | 48,105 | (41,955 | ) | (8,262 | ) | ||||||||||
| Defined benefit plans and postretirement contributions |
(31,059 | )* | (3,220 | ) | (48,113 | )* | (43,226 | )** | ||||||||
| Environmental payments, net of reimbursements |
(799 | ) | (158 | ) | (9,534 | ) | (11,063 | ) | ||||||||
| Other |
(366 | ) | (11,601 | ) | (5,983 | ) | (9,689 | ) | ||||||||
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| Subtotal |
104,862 | 97,312 | 229,089 | 200,267 | ||||||||||||
| Asbestos related payments, net of insurance recoveries |
(20,044 | ) | (23,079 | ) | (79,277 | ) | (66,731 | ) | ||||||||
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| Total provided by operating activities |
84,818 | 74,233 | 149,812 | 133,536 | ||||||||||||
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| Investing Activities: |
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| Capital expenditures |
(7,034 | ) | (7,444 | ) | (34,737 | ) | (21,033 | ) | ||||||||
| Proceeds from disposition of capital assets |
73 | 190 | 4,793 | 375 | ||||||||||||
| Payment for acquisition, net of cash acquired |
(996 | ) | (89,294 | ) | (36,590 | ) | (140,461 | ) | ||||||||
| Proceeds from divestiture |
— | — | 1,000 | 4,615 | ||||||||||||
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| Total used for investing activities |
(7,957 | ) | (96,548 | ) | (65,534 | ) | (156,504 | ) | ||||||||
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| Financing Activities: |
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| Dividends paid |
(15,035 | ) | (13,360 | ) | (56,992 | ) | (50,371 | ) | ||||||||
| Reacquisition of shares on open market |
(30,000 | ) | (19,999 | ) | (79,999 | ) | (49,988 | ) | ||||||||
| Stock options exercised - net of shares reacquired |
3,295 | 6,024 | 23,232 | 22,375 | ||||||||||||
| Excess tax benefit from stock-based compensation |
391 | 1,470 | 6,097 | 3,290 | ||||||||||||
| Change in short-term debt |
333 | (440 | ) | (1,003 | ) | (2,739 | ) | |||||||||
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| Total used for financing activities |
(41,016 | ) | (26,305 | ) | (108,665 | ) | (77,433 | ) | ||||||||
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| Effect of exchange rate on cash and cash equivalents |
(1,939 | ) | 5,997 | (3,465 | ) | 628 | ||||||||||
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| Increase (decrease) in cash and cash equivalents |
33,906 | (42,623 | ) | (27,852 | ) | (99,773 | ) | |||||||||
| Cash and cash equivalents at beginning of period |
211,183 | 315,564 | 272,941 | 372,714 | ||||||||||||
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| Cash and cash equivalents at end of period |
$ | 245,089 | $ | 272,941 | $ | 245,089 | $ | 272,941 | ||||||||
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| * | Includes a $30 million discretionary pension contribution. |
| ** | Includes a $25 million discretionary pension contribution. |
CRANE CO.
Order Backlog
(in thousands)
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| 2011 | 2011 | 2011 | 2011 | 2010 | ||||||||||||||||
| Aerospace & Electronics |
$ | 410,794 | $ | 409,284 | $ | 431,799 | $ | 454,559 | $ | 431,467 | ||||||||||
| Engineered Materials |
11,110 | 9,879 | 13,087 | 13,826 | 11,831 | |||||||||||||||
| Merchandising Systems |
15,212 | 20,929 | 26,898 | 25,008 | 30,170 | |||||||||||||||
| Fluid Handling |
313,715 | * | 328,757 | * | 323,045 | 305,255 | 271,825 | |||||||||||||
| Controls |
27,120 | 32,145 | 30,323 | 24,015 | 22,354 | |||||||||||||||
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| Total Backlog |
$ | 777,951 | $ | 800,994 | $ | 825,152 | $ | 822,663 | $ | 767,647 | ||||||||||
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| * | Includes Order Backlog of $7.1 million at December 31, 2011 and $5.4 million at September 30, 2011 pertaining to the 2011 acquisition of WTA. |
CRANE CO.
Non-GAAP Financial Measures
(in thousands)
| Three Months Ended December 31, |
Twelve Months Ended December 31, |
Percent Change December 31, 2011 |
Percent Change December 31, 2011 |
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| 2011 | 2010 | 2011 | 2010 | Three Months | Twelve Months | |||||||||||||||||||
| INCOME ITEMS | ||||||||||||||||||||||||
| Net Sales |
$ | 631,618 | $ | 574,006 | $ | 2,545,867 | $ | 2,217,825 | 10.0 | % | 14.8 | % | ||||||||||||
| Operating Profit (Loss) |
(192,655 | ) | 53,699 | 42,264 | 235,162 | -458.8 | % | -82.0 | % | |||||||||||||||
| Percentage of Sales |
-30.5 | % | 9.4 | % | 1.7 | % | 10.6 | % | ||||||||||||||||
| Special Items impacting Operating Profit (Loss): |
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| Asbestos Provision - Pre-Tax (a) |
241,647 | — | 241,647 | — | ||||||||||||||||||||
| Environmental Provision - Pre-Tax (b) |
30,327 | — | 30,327 | — | ||||||||||||||||||||
| Restructuring Charges - Pre-Tax (c) |
— | 7,841 | — | 6,676 | ||||||||||||||||||||
| Non-deductible Acquisition Transaction Costs (d) |
— | 1,276 | — | 1,276 | ||||||||||||||||||||
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| Operating Profit before Special Items |
$ | 79,319 | $ | 62,816 | $ | 314,238 | $ | 243,114 | 26.3 | % | 29.3 | % | ||||||||||||
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| Percentage of Sales |
12.6 | % | 10.9 | % | 12.3 | % | 11.0 | % | ||||||||||||||||
| Net Income (Loss) Attributable to Common Shareholders |
$ | (125,129 | ) | $ | 39,388 | $ | 26,315 | $ | 154,170 | |||||||||||||||
| Per Share |
$ | (2.16 | ) | $ | 0.66 | $ | 0.44 | $ | 2.59 | -425.4 | % | -82.8 | % | |||||||||||
| Special Items impacting Net Income (Loss) Attributable to Common Shareholders: |
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| Asbestos Provision - Net of Tax (a) |
157,071 | 157,071 | ||||||||||||||||||||||
| Per Share |
$ | 2.71 | $ | 2.65 | ||||||||||||||||||||
| Environmental Provision - Net of Tax (b) |
19,713 | 19,713 | ||||||||||||||||||||||
| Per Share |
$ | 0.34 | $ | 0.33 | ||||||||||||||||||||
| Restructuring Charges - Net of Tax (c) |
5,293 | 4,470 | ||||||||||||||||||||||
| Per Share |
$ | 0.09 | $ | 0.08 | ||||||||||||||||||||
| Non-deductible Acquisition Transaction Costs (d) |
1,276 | 1,276 | ||||||||||||||||||||||
| Per Share |
$ | 0.02 | $ | 0.02 | ||||||||||||||||||||
| Reversal of Tax Provision on Undistributed Foreign Earnings (e) |
($ | 5,625 | ) | ($ | 5,625 | ) | ||||||||||||||||||
| Per Share |
$ | (0.09 | ) | $ | (0.09 | ) | ||||||||||||||||||
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| Net Income Attributable To Common Shareholders Before Special Items |
$ | 51,654 | $ | 40,332 | $ | 203,098 | $ | 154,291 | 28.1 | % | 31.6 | % | ||||||||||||
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| Per Basic Share |
$ | 0.89 | $ | 0.69 | $ | 3.49 | $ | 2.63 | ||||||||||||||||
| Per Diluted Share |
$ | 0.88 | $ | 0.68 | $ | 3.43 | $ | 2.59 | 29.2 | % | 32.4 | % | ||||||||||||
In the three months ended December 31, 2011, Average Shares Outstanding excluding the effect of diluted stock options were used to compute the per share amounts since this period was in a loss position. Had Net Income Attributable To Common Shareholders been reported for this period, Average Shares Outstanding would have included the effect of diluted stock options when computing per share amounts (see chart below).
| Average Basic Shares Outstanding |
57,903 | |||
| Effect of Diluted Stock Options |
915 | |||
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| Average Shares Outstanding including the effect of Stock Options |
58,818 |
When considering the effect of dilutive stock options on shares outstanding, Net Income Attributable To Common Shareholders Before Special Items is $0.88 per share for the three months ended December 31, 2011.
| (a) | During the three months ended December 31, 2011, the Company recorded an Asbestos Provision. |
| (b) | During the three months ended December 31, 2011, the Company recorded a charge related to an increase in the Company’s expected liability at its Goodyear, AZ Superfund Site. |
| (c) | Amounts represent restructuring charges in connection with the Restructuring Program. |
| (d) | During the three months ended December 31, 2010, the Company recorded non-deductible transaction costs associated with the acquisition of Money Controls. |
| (e) | During the three months ended December 31, 2010, the Company recorded a tax benefit caused by the reinvestment of non-U.S. earnings associated with the acquisition of Money Controls. |
| Three Months Ended December 31, |
Twelve Months Ended December 31, |
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| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| CASH FLOW ITEMS | ||||||||||||||||
| Cash Provided by Operating Activities before Asbestos - Related Payments |
$ | 104,862 | * | $ | 97,312 | $ | 229,089 | * | $ | 200,267 | ** | |||||
| Asbestos Related Payments, Net of Insurance Recoveries |
(20,044 | ) | (23,079 | ) | (79,277 | ) | (66,731 | ) | ||||||||
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| Cash Provided by Operating Activities |
84,818 | 74,233 | 149,812 | 133,536 | ||||||||||||
| Less: Capital Expenditures |
(7,034 | ) | (7,444 | ) | (34,737 | ) | (21,033 | ) | ||||||||
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| Free Cash Flow |
$ | 77,784 | $ | 66,789 | $ | 115,075 | $ | 112,503 | ||||||||
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| * | Includes a $30 million discretionary pension contribution. |
| ** | Includes a $25 million discretionary pension contribution. |
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.