Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - CRANE CO /DE/ | exhibit991-pressreleasexq4.htm |
| 8-K - 8-K - CRANE CO /DE/ | a8-kxq42016asbestosander.htm |
Exhibit 99.2
CRANE CO.
Income Statement Data
(in millions, except per share data)
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Net Sales: | ||||||||||||||||
Fluid Handling | $ | 240.4 | $ | 259.4 | $ | 999.5 | $ | 1,091.3 | ||||||||
Payment & Merchandising Technologies | 194.6 | 174.0 | 745.8 | 703.0 | ||||||||||||
Aerospace & Electronics | 186.5 | 190.9 | 745.7 | 691.3 | ||||||||||||
Engineered Materials | 59.9 | 56.4 | 257.0 | 254.8 | ||||||||||||
Total Net Sales | $ | 681.4 | $ | 680.6 | $ | 2,748.0 | $ | 2,740.5 | ||||||||
Operating Profit (Loss): | ||||||||||||||||
Fluid Handling | $ | 28.0 | $ | 29.2 | $ | 119.5 | $ | 125.4 | ||||||||
Payment & Merchandising Technologies | 38.4 | 28.9 | 135.5 | 101.4 | ||||||||||||
Aerospace & Electronics | 39.2 | 46.9 | 149.8 | 145.1 | ||||||||||||
Engineered Materials | 10.4 | 9.5 | 49.0 | 48.4 | ||||||||||||
Corporate | (15.2 | ) | (11.0 | ) | (61.1 | ) | * | (47.5 | ) | |||||||
Asbestos Provision | (192.4 | ) | — | (192.4 | ) | — | ||||||||||
Total Operating (Loss) Profit | (91.6 | ) | 103.5 | 200.3 | 372.9 | |||||||||||
Interest Income | 0.5 | 0.5 | 1.9 | 1.9 | ||||||||||||
Interest Expense | (9.0 | ) | (9.1 | ) | (36.5 | ) | (37.6 | ) | ||||||||
Miscellaneous- Net | (1.1 | ) | (0.4 | ) | (1.6 | ) | (0.7 | ) | ||||||||
(Loss) Income Before Income Taxes | (101.2 | ) | 94.4 | 164.1 | 336.5 | |||||||||||
(Benefit from) Provision for Income Taxes | (37.6 | ) | 28.8 | 40.3 | 106.5 | |||||||||||
Net (loss) income before allocation to noncontrolling interests | (63.6 | ) | 65.6 | 123.8 | 230.0 | |||||||||||
Less: Noncontrolling interest in subsidiaries' earnings | 0.4 | 0.4 | 1.0 | 1.1 | ||||||||||||
Net (loss) income attributable to common shareholders | $ | (64.0 | ) | $ | 65.2 | $ | 122.8 | $ | 228.9 | |||||||
Share Data: | ||||||||||||||||
(Loss) Earnings per Diluted Share | $ | (1.09 | ) | $ | 1.11 | $ | 2.07 | $ | 3.89 | |||||||
Average Diluted Shares Outstanding | 58.8 | 58.7 | 59.3 | 58.8 | ||||||||||||
Average Basic Shares Outstanding | 58.8 | 58.1 | 58.5 | 58.1 | ||||||||||||
Supplemental Data: | ||||||||||||||||
Cost of Sales | $ | 433.7 | $ | 441.4 | $ | 1,758.3 | $ | 1,783.4 | ||||||||
Asbestos Provision | 192.4 | — | 192.4 | — | ||||||||||||
Selling, General & Administrative | 146.9 | 135.0 | 597.0 | * | 566.2 | |||||||||||
Repositioning Charges (see non-GAAP measures) | — | (0.1 | ) | — | 11.6 | |||||||||||
Acquisition Related Charges (see non-GAAP measures) | — | 0.8 | — | 6.6 | ||||||||||||
Depreciation and Amortization ** | 16.6 | 17.1 | 67.4 | 67.0 | ||||||||||||
Stock-Based Compensation Expense ** | 4.9 | 5.5 | 21.7 | 21.3 | ||||||||||||
* Includes a $5 million legal settlement charge. | ||||||||||||||||
** Amount included within cost of sales and selling, general & administrative costs. | ||||||||||||||||
1
CRANE CO.
Condensed Balance Sheets
(in millions)
December 31, 2016 | December 31, 2015 | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and Cash Equivalents | $ | 509.7 | $ | 363.5 | ||||
Accounts Receivable, net | 396.4 | 397.6 | ||||||
Current Insurance Receivable - Asbestos | 18.0 | 20.5 | ||||||
Inventories, net | 342.5 | 376.9 | ||||||
Other Current Assets | 49.1 | 45.0 | ||||||
Total Current Assets | 1,315.7 | 1,203.5 | ||||||
Property, Plant and Equipment, net | 278.9 | 276.0 | ||||||
Long-Term Insurance Receivable - Asbestos | 125.2 | 108.7 | ||||||
Other Assets | 559.0 | 580.8 | ||||||
Goodwill | 1,149.2 | 1,167.9 | ||||||
Total Assets | $ | 3,428.0 | $ | 3,336.9 | ||||
LIABILITIES AND EQUITY | ||||||||
Current Liabilities | ||||||||
Notes Payable and Current Maturities of Long-Term Debt | $ | — | $ | 49.6 | ||||
Accounts Payable | 223.2 | 223.3 | ||||||
Current Asbestos Liability | 71.0 | 75.0 | ||||||
Accrued Liabilities | 223.1 | 218.6 | ||||||
Income Taxes | 3.5 | 6.3 | ||||||
Total Current Liabilities | 520.8 | 572.8 | ||||||
Long-Term Debt | 745.3 | 744.6 | ||||||
Long-Term Deferred Tax Liability | 42.4 | 50.0 | ||||||
Long-Term Asbestos Liability | 624.9 | 470.5 | ||||||
Other Liabilities | 348.9 | 348.1 | ||||||
Total Equity | 1,145.7 | 1,150.8 | ||||||
Total Liabilities and Equity | $ | 3,428.0 | $ | 3,336.9 | ||||
2
CRANE CO.
Condensed Statements of Cash Flows
(in millions)
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Operating Activities: | ||||||||||||||||
Net (loss) income attributable to common shareholders | $ | (64.0 | ) | $ | 65.2 | $ | 122.8 | $ | 228.9 | |||||||
Noncontrolling interest in subsidiaries' earnings | 0.4 | 0.4 | 1.0 | 1.1 | ||||||||||||
Net (loss) income before allocations to noncontrolling interests | (63.6 | ) | 65.6 | 123.8 | 230.0 | |||||||||||
Asbestos provision | 192.4 | — | 192.4 | — | ||||||||||||
Restructuring - Non Cash | — | 0.5 | — | 2.0 | ||||||||||||
Depreciation and amortization | 16.6 | 17.1 | 67.4 | 67.0 | ||||||||||||
Stock-based compensation expense | 4.9 | 5.5 | 21.7 | 21.3 | ||||||||||||
Defined benefit plans and postretirement credit | (1.8 | ) | (1.9 | ) | (9.1 | ) | (11.6 | ) | ||||||||
Deferred income taxes | (41.2 | ) | 16.3 | (25.1 | ) | 39.7 | ||||||||||
Cash provided by (used for) operating working capital | 61.4 | 30.5 | 27.0 | (16.1 | ) | |||||||||||
Defined benefit plans and postretirement contributions | (2.4 | ) | (2.5 | ) | (8.8 | ) | (17.9 | ) | ||||||||
Environmental payments, net of reimbursements | (3.4 | ) | (4.6 | ) | (11.6 | ) | (18.2 | ) | ||||||||
Other | 1.3 | 0.8 | (3.6 | ) | (17.0 | ) | ||||||||||
Subtotal | 164.2 | 127.3 | 374.1 | 279.2 | ||||||||||||
Asbestos related payments, net of insurance recoveries | (14.5 | ) | (13.7 | ) | (56.0 | ) | (49.9 | ) | ||||||||
Total provided by operating activities | 149.7 | 113.6 | 318.1 | 229.3 | ||||||||||||
Investing Activities: | ||||||||||||||||
Capital expenditures | (13.0 | ) | (11.4 | ) | (51.5 | ) | (39.6 | ) | ||||||||
Proceeds from disposition of capital assets | 0.1 | 2.5 | 0.9 | 4.4 | ||||||||||||
Total used for investing activities | (12.9 | ) | (8.9 | ) | (50.6 | ) | (35.2 | ) | ||||||||
Financing Activities: | ||||||||||||||||
Dividends paid | (19.4 | ) | (19.2 | ) | (77.2 | ) | (76.6 | ) | ||||||||
Reacquisition of shares on open market | — | — | — | (25.0 | ) | |||||||||||
Stock options exercised - net of shares reacquired | 16.8 | 1.6 | 26.4 | 8.9 | ||||||||||||
Excess tax shortfall from stock-based compensation | — | 0.3 | — | 0.1 | ||||||||||||
Repayment of credit facility | — | — | — | (100.0 | ) | |||||||||||
(Repayment) proceeds from issuance of commercial paper | (34.0 | ) | (48.2 | ) | (49.6 | ) | 48.8 | |||||||||
Total used for financing activities | (36.6 | ) | (65.5 | ) | (100.4 | ) | (143.8 | ) | ||||||||
Effect of exchange rate on cash and cash equivalents | (26.8 | ) | (10.9 | ) | (20.9 | ) | (33.1 | ) | ||||||||
Increase in cash and cash equivalents | 73.4 | 28.3 | 146.2 | 17.2 | ||||||||||||
Cash and cash equivalents at beginning of period | 436.3 | 335.2 | 363.5 | 346.3 | ||||||||||||
Cash and cash equivalents at end of period | $ | 509.7 | $ | 363.5 | $ | 509.7 | $ | 363.5 | ||||||||
3
CRANE CO.
Order Backlog
(in millions)
December 31, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | December 31, 2015 | ||||||||||||||||
Fluid Handling | $ | 228.3 | $ | 241.6 | $ | 246.3 | $ | 263.4 | $ | 267.2 | ||||||||||
Payment & Merchandising Technologies | 94.0 | 65.6 | 65.8 | 60.4 | 62.6 | |||||||||||||||
Aerospace & Electronics | 353.4 | 377.1 | 435.9 | 418.7 | 436.4 | |||||||||||||||
Engineered Materials | 15.7 | 12.3 | 15.4 | 16.0 | 15.2 | |||||||||||||||
Total Backlog | $ | 691.4 | $ | 696.7 | $ | 763.5 | $ | 758.6 | $ | 781.5 | ||||||||||
4
CRANE CO.
Non-GAAP Financial Measures
(in millions, except per share data)
Three Months Ended December 31, | Twelve Months Ended December 31, | Percent Change December 31, 2016 | Percent Change December 31, 2016 | ||||||||||||||||||
2016 | 2015 | 2016 | 2015 | Three Months | Twelve Months | ||||||||||||||||
INCOME ITEMS | |||||||||||||||||||||
Net Sales | $ | 681.4 | $ | 680.6 | $ | 2,748.0 | $ | 2,740.5 | 0.1 | % | 0.3 | % | |||||||||
Operating Profit (Loss) | (91.6 | ) | 103.5 | 200.3 | 372.9 | (188.5 | )% | (46.3 | )% | ||||||||||||
Percentage of Sales | (13.4 | )% | 15.2 | % | 7.3 | % | 13.6 | % | |||||||||||||
Special Items impacting Operating Profit: | |||||||||||||||||||||
Asbestos provision | 192.4 | — | 192.4 | — | |||||||||||||||||
MEI Acquisition related integration charges | — | 1.6 | — | 7.2 | |||||||||||||||||
MEI Acquisition related restructuring charges | — | (0.8 | ) | — | (0.6 | ) | |||||||||||||||
Repositioning charges | — | (0.1 | ) | — | 11.6 | ||||||||||||||||
Legal settlement charge | — | — | 5.0 | — | |||||||||||||||||
Operating Profit before Special Items | $ | 100.8 | $ | 104.2 | $ | 397.7 | $ | 391.1 | (3.2 | )% | 1.7 | % | |||||||||
Percentage of Sales | 14.8 | % | 15.3 | % | 14.5 | % | 14.3 | % | |||||||||||||
Net Income Attributable to Common Shareholders | $ | (64.0 | ) | $ | 65.2 | $ | 122.8 | $ | 228.9 | ||||||||||||
Per Share | $ | (1.09 | ) | $ | 1.11 | $ | 2.07 | $ | 3.89 | NM | (46.8 | )% | |||||||||
Special Items Impacting Net Income Attributable to Common Shareholders: | |||||||||||||||||||||
Asbestos provision - Net of Tax | 125.1 | — | 125.1 | — | |||||||||||||||||
Per Share | $ | 2.13 | $ | 2.11 | |||||||||||||||||
MEI Acquisition related integration charges - Net of Tax | — | 1.0 | — | 4.8 | |||||||||||||||||
Per Share | $ | 0.02 | $ | 0.08 | |||||||||||||||||
MEI Acquisition related restructuring charges - Net of Tax | — | (0.6 | ) | — | (0.3 | ) | |||||||||||||||
Per Share | $ | (0.01 | ) | $ | (0.01 | ) | |||||||||||||||
Repositioning charges - Net of Tax | — | 0.2 | — | 9.2 | |||||||||||||||||
Per Share | $ 0.00 | $ | 0.16 | ||||||||||||||||||
Legal settlement charge - Net of Tax | — | — | 3.3 | — | |||||||||||||||||
Per Share | $ | 0.05 | |||||||||||||||||||
Net Income Attributable To Common Shareholders Before Special Items | $ | 61.1 | $ | 65.8 | $ | 251.1 | $ | 242.5 | (7.2 | )% | 3.6 | % | |||||||||
Per Basic Share | $ | 1.04 | $ | 1.13 | $ | 4.30 | $ | 4.18 | |||||||||||||
Per Diluted Share | $ | 1.02 | $ | 1.12 | $ | 4.23 | $ | 4.13 | (8.8 | )% | 2.6 | % | |||||||||
In the three months ended December 31, 2016, 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). | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Average Basic Shares Outstanding | 58,768 | ||||||||||||||||||||
Effect of Diluted Stock Options | 991 | ||||||||||||||||||||
Average Shares Outstanding including the effect of Stock Options | 59,759 | ||||||||||||||||||||
When considering the effect of dilutive stock options on shares outstanding, Net Income Attributable To Common Shareholders Before Special Items is $1.02 per share for the three months ended December 31, 2016. | |||||||||||||||||||||
5
Special Items Impacting Provision for Income Taxes | |||||||||||||||||||||
Provision for Income Taxes - GAAP Basis | $ | (37.6 | ) | $ | 28.8 | $ | 40.3 | $ | 106.5 | ||||||||||||
Tax effect of asbestos provision | 67.3 | — | 67.3 | — | |||||||||||||||||
Tax effect of MEI acquisition related integration charges | — | 0.6 | — | 2.3 | |||||||||||||||||
Tax effect of MEI acquisition related restructuring charges | — | (0.2 | ) | — | — | ||||||||||||||||
Tax effect of repositioning charges | — | (0.3 | ) | — | 2.4 | ||||||||||||||||
Tax effect of legal settlement charge | — | — | 1.8 | — | |||||||||||||||||
Provision for Income Taxes - non-GAAP Basis | $ | 29.7 | $ | 29.0 | $ | 109.4 | $ | 111.2 | |||||||||||||
Segment Information: | For the three months ended December 31, 2016 | |||||||||||||||||||||||||||
Fluid Handling | Payment & Merchandising Technologies | Aerospace & Electronics | Engineered Materials | Corporate | Asbestos Provision | Total Company | ||||||||||||||||||||||
Net Sales | $ | 240.4 | $ | 194.6 | $ | 186.5 | $ | 59.9 | $ | — | $ | — | $ | 681.3 | ||||||||||||||
Operating Profit (Loss)- GAAP | 28.0 | 38.4 | 39.2 | 10.4 | (15.2 | ) | (192.4 | ) | (91.6 | ) | ||||||||||||||||||
Asbestos Provision | — | — | — | — | — | 192.4 | 192.4 | |||||||||||||||||||||
Operating Profit before Special Items | 28.0 | 38.4 | 39.2 | 10.4 | (15.2 | ) | — | 100.8 | ||||||||||||||||||||
Percentage of Sales | 11.6 | % | 19.7 | % | 21.0 | % | 17.4 | % | 14.8 | % | ||||||||||||||||||
For the three months ended December 31, 2015 | |||||||||||||||||||||||||
Fluid Handling | Payment & Merchandising Technologies | Aerospace & Electronics | Engineered Materials | Corporate | Total Company | ||||||||||||||||||||
Net Sales | $ | 259.4 | $ | 174.0 | $ | 190.9 | $ | 56.4 | $ | — | $ | 680.6 | |||||||||||||
Operating Profit - GAAP | 29.2 | 28.9 | 46.9 | 9.5 | (11.0 | ) | 103.5 | ||||||||||||||||||
Acquisition related integration charges | — | 0.8 | — | — | — | 0.8 | |||||||||||||||||||
Repositioning Charges | 1.0 | — | (2.0 | ) | — | 1.0 | (0.1 | ) | |||||||||||||||||
Operating Profit before Special Items | 30.2 | 29.7 | 44.9 | 9.5 | (10.1 | ) | 104.2 | ||||||||||||||||||
Percentage of Sales | 11.6 | % | 17.1 | % | 23.5 | % | 16.8 | % | 15.3 | % | |||||||||||||||
6
CRANE CO.
Guidance
(in millions, except per share data)
Three Months Ended December 31, | Twelve Months Ended December 31, | 2017 Full Year Guidance | ||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | Low | High | |||||||||||||||||||
CASH FLOW ITEMS | ||||||||||||||||||||||||
Cash Provided by Operating Activities | ||||||||||||||||||||||||
before Asbestos - Related Payments | $ | 164.2 | $ | 127.3 | $ | 374.1 | $ | 279.2 | $ | 325.0 | $ | 355.0 | ||||||||||||
Asbestos Related Payments, Net of Insurance Recoveries | (14.5 | ) | (13.7 | ) | (56.0 | ) | (49.9 | ) | (55.0 | ) | (55.0 | ) | ||||||||||||
Cash Provided by Operating Activities | 149.7 | 113.6 | 318.1 | 229.3 | 270.0 | 300.0 | ||||||||||||||||||
Less: Capital Expenditures | (13.0 | ) | (11.4 | ) | (51.5 | ) | (39.6 | ) | (50.0 | ) | (50.0 | ) | ||||||||||||
Free Cash Flow | $ | 136.7 | $ | 102.1 | $ | 266.6 | $ | 189.6 | $ | 220.0 | $ | 250.0 | ||||||||||||
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. | ||||||||||
7