-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, MYkmW3L8Ia1iecwuQ61clLhazfrsm11eh0mSDW8NrX3Q9A93+pLWxoqVz0nYkk7n g9QgHtjmJbwme5ejGKt+fg== 0000025445-95-000001.txt : 19950512 0000025445-95-000001.hdr.sgml : 19950512 ACCESSION NUMBER: 0000025445-95-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950511 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CRANE CO /DE/ CENTRAL INDEX KEY: 0000025445 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS FABRICATED METAL PRODUCTS [3490] IRS NUMBER: 131952290 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-01657 FILM NUMBER: 95537028 BUSINESS ADDRESS: STREET 1: 100 FIRST STAMFORD PLACE CITY: STAMFORD STATE: CT ZIP: 06902 BUSINESS PHONE: 2033637300 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 1995 Commission File Number 1-1657 CRANE CO. (Exact name of registrant as specified in its charter) Delaware 13-1952290 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 100 First Stamford Place, Stamford, Ct. 06902 (Address of principal executive office) (Zip Code) (203) 363-7300 (Registrant's telephone number, including area code) (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 The number of shares outstanding of the issuer's classes of common stock, as of April 30, 1995: Common stock, $1.00 Par Value - 30,166,447 shares Part I - Financial Information Item 1. Financial Statements Crane Co. and Subsidiaries Consolidated Statements of Income (In Thousands, Except Per Share Amounts) (Unaudited)
Periods Ended March 31, Three Months 1995 1994 Net Sales $432,578 $331,705 Operating Costs and Expenses: Cost of sales 323,458 259,754 Selling, general and administrative 68,597 48,816 Depreciation and amortization 11,904 8,308 403,959 316,878 Operating Profit 28,619 14,827 Other Income (Deductions): Interest income 368 711 Interest expense (6,993) (3,326) Miscellaneous - net (97) 241 (6,722) (2,374) Income Before Taxes 21,897 12,453 Provision for Income Taxes 8,622 5,044 Net Income $ 13,275 $ 7,409 Net Income Per Share $.44 $.25 Average Shares Outstanding 30,273 30,051 Dividends Per Share $ .1875 $ .1875 See Notes to Consolidated Financial Statements
-2- Part I - Financial Information Crane Co. and Subsidiaries Consolidated Balance Sheets (In Thousands, Except Per Share Amounts) (Unaudited)
March 31, December 31, 1995 1994 1994 Assets Current Assets: Cash and cash equivalents $ 1,693 $ - $ 2,072 Accounts receivable, less allowance of $3,717,($3,034 at March 31, 1994 and $3,693 at December 31, 1994) 247,819 207,575 234,695 Inventories at lower of cost, principally LIFO, or market; replacement cost would be higher by approximately $53,612 ($54,763 at March 31, 1994 and $52,739 at December 31, 1994) Finished goods 121,596 128,955 116,625 Finished parts and subassemblies 31,699 24,166 30,556 Work in process 40,862 33,749 39,286 Raw materials 53,493 35,432 50,598 247,650 222,302 237,065 Other current assets 6,722 8,191 6,407 Total Current Assets 503,884 438,068 480,239 Property, Plant and Equipment: Cost 516,209 480,594 513,348 Less accumulated depreciation 257,117 227,415 250,350 259,092 253,179 262,998 Other Assets 30,670 32,973 30,173 Intangibles, less accumulated amortization of $7,760 ($5,127 at March 31, 1994 and $7,716 at December 31, 1994.) 62,366 27,185 63,434 Cost in excess of net assets acquired less accumulated amortization of $18,205 ($12,657 at March 31, 1994 and $16,730 at December 31, 1994) 173,521 120,772 171,201 $1,029,533 $872,177 $1,008,045 See Notes to Consolidated Financial Statements -3- /TABLE Part I - Financial Information
March 31, December 31, 1995 1994 1994 Liabilities and Shareholders' Equity Current Liabilities: Current maturities of long-term debt $ 1,223 $ 2,424 $ 1,272 Loans payable 18,423 49,085 20,986 Accounts payable 103,896 91,565 95,211 Accrued liabilities 116,995 99,684 119,382 U.S and foreign taxes on income 11,965 10,601 7,444 Total Current Liabilities 252,502 253,359 244,295 Long-Term Debt 333,576 244,764 331,289 Deferred Income Taxes 33,180 12,293 32,440 Other Liabilities 17,391 19,393 20,159 Accrued Postretirement Benefits 43,075 43,068 43,066 Accrued Pension Liability 8,709 6,761 8,804 Preferred Shares, Par Value $.01 Authorized - 5,000 Shares - - - Common Shareholders' Equity: Common shares 30,142 29,911 30,047 Capital surplus 14,678 10,871 12,766 Retained earnings 304,139 265,704 296,268 Currency translation adjustment (7,859) (13,947) (11,089) Total Common Shareholders' Equity 341,100 292,539 327,992 $1,029,533 $872,177 $1,008,045 See Notes to Consolidated Financial Statements -4- /TABLE Part I - Financial Information (Cont'd.) Crane Co. and Subsidiaries Consolidated Statements of Cash Flows (In Thousands) (Unaudited)
Three Months Ended March 31, 1995 1994 Cash flows from operating activities: Net income $ 13,275 $ 7,409 Depreciation 9,057 6,978 Amortization 2,847 1,330 Deferred taxes 549 153 Cash used for operating working capital (12,120) (3,650) Other (1,854) (172) Total from operating activities 11,754 12,048 Cash flows from investing activities: Capital expenditures (6,967) (5,769) Payments for acquisitions (1,879) (68,734) Proceeds from divestitures - - Proceeds from disposition of capital assets 1,778 280 Proceeds from the sale of equity investments - - Total used for investing activities (7,068) (74,223) Cash flows from financing activities: Equity: Dividends paid (5,655) (5,608) Reacquisition of shares (2,367) (42) Stock options exercised 4,373 785 Net Equity (3,649) (4,865) Debt: Proceeds from issuance of long-term debt - 14,460 Repayments of long-term debt (3,578) (1,053) Net increase in short-term debt 2,065 41,024 Net Debt (1,513) 54,431 Total(used for)provided from financing activities (5,162) 49,566 Effect of exchange rate on cash and cash equivalents 97 17 Decrease in cash and cash equivalents (379) (12,592) Cash and cash equivalents at beginning of period 2,072 12,592 Cash and cash equivalents at end of period $ 1,693 $ - Detail of Cash (Used for) Provided From Operating Working Capital: Accounts receivable $(11,939) $ (7,693) Inventories (9,524) (8,152) Other current assets (277) 452 Accounts payable 2,686 9,232 Accrued liabilities 2,553 (538) U.S. and foreign taxes on income 4,381 3,049 Total $(12,120) $ (3,650) Supplemental disclosure of cash flow information: Interest paid $ 6,251 $ 5,831 Income taxes paid 3,418 1,952 See Notes to Consolidated Financial Statements -5-
Part I - Financial Information (Cont'd.) Notes to Consolidated Financial Statements 1. The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim period presented. 2. Sales and operating profit by segment are as follows:
Three Months Ended March 31, 1995 1994 (In thousands) Net Sales: Fluid Handling $ 78,860 $ 65,471 Aerospace 51,049 18,738 Engineered Materials 53,938 48,700 Crane Controls 33,072 8,380 Merchandising Systems 47,623 36,738 Wholesale Distribution 169,106 154,803 Other 3,128 3,758 Intersegment Elimination (4,198) (4,883) Total $432,578 $331,705 Operating Profit (Loss): Fluid Handling $ 2,243 $ 3,273 Aerospace 11,908 3,543 Engineered Materials 6,675 5,514 Crane Controls 2,888 101 Merchandising Systems 6,616 4,536 Wholesale Distribution 1,828 1,406 Other 221 (354) Corporate (3,700) (3,109) Intersegment Elimination (60) (83) Total $ 28,619 $ 14,827 3.Supplemental schedule on non-cash financing activities: Crane Co. purchased all of the capital stock of ELDEC Corporation in March 1994 for $77,300 and Mark Controls Corporation in April 1994 for $96,900. The fair value of assets and liabilities at the date of acquisition are presented as follows: Mark ELDEC Controls (in thousands) Fair value of assets acquired $138,951 $170,288 Cash paid for capital stock (77,300) (96,900) Assumption of liabilities $ 61,651 $ 73,388 -6-
Part I - Financial Information (Cont'd) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Three Months Ended March 31, 1995 and 1994 Results From Operations: Net income for the quarter ended March 31, 1995 was a record $13.3 million or $.44 per share, up 80% from the $7.4 million and $.25 per share reported in the same period last year. Sales in the quarter were $432.6 million, up 30% from $331.7 million last year, and operating profit increased 93% to $28.6 million. Fluid Handling sales were up 20% but operating profit was down 31% compared to the first quarter last year. Sales were up largely due to the inclusion of the Mark Controls valve businesses acquired in April 1994, and also due to strong demand in Crane Ltd. (U.K.) markets. Segment sales and operating profit comparisons were adversely impacted primarily by Cochrane due to losses on a foreign contract, decisions by a new management team to incur certain restructuring costs, and a lawsuit settlement. Crane Pumps and Systems sales were down slightly but operating profit and margins were up due to the effects of the Burks/Deming post-acquisition consolidation cost savings. Aerospace sales and operating profit were up significantly due largely to the inclusion of ELDEC which was acquired in late March 1994, and improved operating results at both Hydro-Aire and Lear Romec. ELDEC had its highest quarterly profit since the acquisition and its strong performance is expected to continue. The improvements at Hydro-Aire and Lear Romec resulted from market penetration and productivity increases. Hydro-Aire also had higher aftermarket sales in the quarter. Engineered Materials sales were up 11% due to strong end markets for the products of Kemlite, Cor Tec, and Resistoflex. Resistoflex also benefited from new product introductions. The segment's 21% operating profit increase from last year was largely due to Cor Tec and Resistoflex. Kemlite, Cor Tec and Resistoflex are each leaders in their served markets and enjoy high profitability due to a competitive cost advantage. Crane Plumbing sales declined 17% due to the weak Canadian housing market but operating profit was slightly improved. Crane Controls sales and operating profit were up dramatically in the quarterly comparisons primarily due to the inclusion this year of the businesses acquired as part of Mark Controls in April 1994. All businesses in this segment (Azonix, Barksdale, Dynalco, Powers Process Controls, and Ferguson) had better results than last year. Reported results of this segment are somewhat distorted by non-cash goodwill charges of $3 million per year which reduce reported earnings but have no effect on cash flow returns. -7- Merchandising Systems sales were up 30%, largely due to National Vendors' continued success with new product introductions, notably Cafe System "7", higher sales of its broad line of snack, drink and food machines, and the commencement of another contract for the Post Office in March 1995. National Vendors' profits and margins were higher due to the higher sales. National Vendors' results continued to improve despite disruptions caused by construction connected with the last stages of the $25 million plant expansion and cost reduction project. Sales at NRI were up significantly in the quarter but the unit operated at a small loss due entirely to an $.8 million bad debt loss resulting from a customer bankruptcy. Wholesale Distribution sales were up 9% due to Huttig's acquisition of a specialty millwork facility in June 1994, and operating profit was up 30% due to strong results at Crane Supply and improvement at Valve Systems, partly offset by lower margins at Huttig. Net interest expense in the quarter increased $4 million compared to the prior year due to debt financed acquisitions. Net debt was $351.5 million at the end of the quarter, and the net debt to capital ratio was 51% . The effective tax rate decreased to 39.4% in the first quarter of 1995 compared to 40.5% in 1994 due primarily to operating losses in Germany with no tax benefit in 1994. -8- Part I - Financial Information (Cont'd) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Three Months Ended March 31, 1995 and 1994 [CAPTION] Liquidity and Capital Resources: During the first three months of 1995 the company generated $11.8 million of cash from operating activities, compared to $12.0 million in 1994. Net debt totaled 51 percent of capital at March 31, 1995. The current ratio increased to 2.0 with working capital totaling $251.4 million and $184.7 million in 1995 and 1994, respectively. Interest coverage as a result of the Mark Controls acquisition in April 1994 was 4.1, compared to 4.7 at March 31, 1994. The company had unused credit lines of $408 million at March 31, 1995. -9- Part II - Other Information Item 4. Submission of Matters to a vote of Security Holders A) The Annual Meeting of shareholders was held on May 8, 1995. B) The following three Directors were reelected to serve for three years until the Annual Meeting of 1998. Mr. Mone Anathan,III Vote for - 27,397,368 Vote withheld - 133,278 Mr.Richard S.Forte` Vote for - 27,397,254 Vote withheld - 133,392 The following Director was elected to serve for three years until the Annual Meeting of 1998. Mr.Jean Gaulin Vote for - 27,387,338 Vote withheld - 143,308 C) The shareholders approved the selection of Deloitte & Touche LLP.as independent auditors for the company for 1995. Vote for - 27,414,369 Vote against - 47,903 Abstained - 68,374 D) Approval of the Company's Stock Option Plan as amended to make an additional 1,000,000 shares of Common Stock available for grant Vote for - 26,383,556 Vote against - 874,736 Abstained - 272,354 Item 6. Exhibits and Reports on Form 8-K 11. Computation of earnings per share for the quarters March 31, 1995 and 1994. 27. Article 5 of Regulation S-X Financial Data Schedule for the first quarter. -10- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CRANE CO. REGISTRANT Date May 11, 1995 By D.S. SMITH Vice President-Finance and Chief Financial Officer Date May 11, 1995 By M.L. RAITHEL Controller -11- Crane Co. and Subsidiaries Exhibit A to Form 10-Q Computation of Net Income per Common Share Three Months March 31, 1995 and 1994 (In Thousands, Except Per Share Amounts)
Period Ended March 31, Three Months 1995 1994 Primary Net Income Per Share: Net income available to shareholders $13,275 $ 7,409 Average primary shares outstanding 30,273 30,051 Net income $.44 $.25 Fully Diluted - Income Per Share: Net income $13,275 $ 7,409 Add back interest, net of tax, assuming the conversion of debentures - 6 Net income available to shareholders, assuming the conversion of debentures $13,275 $ 7,415 Average primary shares outstanding 30,273 30,051 Add: Adjustment for further dilutive effect of stock options (ending market price higher than average market price used in primary shares calculation) 23 - Shares reserved for conversion of debentures - 171 Average fully diluted shares outstanding 30,296 30,222 Net income $.44 $.25
-12- EX-27 2 ARTICLE 5 FDS FOR 1ST QUARTER 10-Q
5 1,000 3-MOS DEC-31-1995 Mar-31-1995 1,693 0 247,819 0 247,650 503,884 516,209 257,116 1,029,533 252,502 0 30,142 0 0 310,958 1,029,532 432,578 432,578 323,458 403,959 (97) 998 6,625 21,897 8,622 13,275 0 0 0 13,275 .44 .44
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