-----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, HuYfIRZoRFNQgsUijmoqFxPXAwxFNpCY/h8wIRNirZFaEqLgh/V8f0neKg/GvNIc 5pEU6Ioet/5ODfzHrPmYbA== 0000025445-94-000029.txt : 19941121 0000025445-94-000029.hdr.sgml : 19941121 ACCESSION NUMBER: 0000025445-94-000029 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941114 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CRANE CO /DE/ CENTRAL INDEX KEY: 0000025445 STANDARD INDUSTRIAL CLASSIFICATION: 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: 94559070 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 September 30, 1994 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 October 31, 1994: Common stock, $1.00 Par Value - 30,102,220 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 September 30, Three Months Nine Months 1994 1993 1994 1993 Net Sales $451,108 $337,924$1,211,542 $987,930 Operating Costs and Expenses: Cost of sales 339,806 263,867 924,329 765,126 Selling, general and administrative 65,508 44,613 177,218 134,589 Depreciation and amortization 13,313 7,294 33,763 21,751 418,627 315,774 1,135,310 921,466 Operating Profit 32,481 22,150 76,232 66,464 Other Income (Deductions): Interest income 467 1,232 2,918 3,718 Interest expense (7,623) (2,872) (16,972) (8,508) Miscellaneous - net 626 563 1,355 938 (6,530) (1,077) (12,699) (3,852) Income Before Taxes 25,951 21,073 63,533 62,612 Provision for Income Taxes 9,949 8,311 24,456 23,358 Net Income $ 16,002 $ 12,762 $ 39,077 $ 39,254 Net Income Per Share $.53 $.42 $1.30 $1.30 Average Shares Outstanding 30,219 30,294 30,129 30,233 Dividends Per Share $ .1875 $ .1875 $ .5625 $ .5625 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)
September 30, December 31, 1994 1993 1993 Assets Current Assets: Cash and cash equivalents $ 2,470 $ 44,365 $ 12,592 Accounts receivable, less allowance of $4,221 ($1,901 at Sept. 30, 1993 and $3,054 at December 31, 1993) 245,778 179,810 178,767 Inventories at lower of cost, principally LIFO, or market; replacement cost would be higher by approximately $56,250 ($53,626 at Sept. 30, 1993 and $54,470 at December 31, 1993) Finished goods 123,367 110,329 119,014 Finished parts and subassemblies 27,308 16,705 24,261 Work in process 41,588 23,564 22,516 Raw materials 52,051 19,654 27,908 244,314 170,252 193,699 Other current assets 13,648 9,635 8,488 Total Current Assets 506,210 404,062 393,546 Property, Plant and Equipment: Cost 524,297 387,318 421,708 Less accumulated depreciation 246,166 219,083 222,314 278,131 168,235 199,394 Other Assets 24,962 23,710 31,563 Intangibles, less accumulated amortization of $6,833 ($5,671 at Sept. 30, 1993 and $5,885 at December 31, 1993.) 66,179 4,570 6,579 Cost in excess of net assets acquired less accumulated amortization of $15,621 ($11,302 at Sept. 30, 1993 and $11,812 at December 31, 1993) 171,818 60,899 113,083 $1,047,300 $661,476 $744,165 See Notes to Consolidated Financial Statements -3- /TABLE Part I - Financial Information
September 30, December 31, 1994 1993 1993 Liabilities and Shareholders' Equity Current Liabilities: Current maturities of long-term debt $ 1,453 $ 6,039 $ 3,852 Loans payable 28,816 41,740 108,048 Accounts payable 100,231 71,131 73,385 Accrued liabilities 110,109 72,918 81,107 U.S and foreign taxes on income 5,402 52 5,291 Total Current Liabilities 246,011 191,880 271,683 Long-Term Debt 386,302 105,492 105,557 Deferred Income Taxes 22,929 6,097 6,138 Reserves and Other Liabilities 23,217 19,701 20,631 Accrued Postretirement Benefits 43,162 40,214 42,570 Accrued Pension Liability 6,991 7,701 6,767 Preferred Shares, Par Value $.01 Authorized - 5,000 Shares - - - Common Shareholders' Equity: Common shares 30,102 30,031 29,863 Capital surplus 14,081 13,992 10,160 Retained earnings 284,478 258,993 236,666 Currency translation adjustment (9,973) (12,625) (12,870) Total Common Shareholders' Equity 318,688 290,391 290,819 $1,047,300 $661,476 $744,165 See Notes to Consolidated Financial Statements -4-
Part I - Financial Information (Cont'd.) Crane Co. and Subsidiaries Consolidated Statements of Cash Flows (In Thousands) (Unaudited)
Nine Months Ended September 30, 1994 1993 Cash flows from operating activities: Net income $ 39,077 $ 39,254 Depreciation 26,075 17,891 Amortization 7,687 3,860 Deferred taxes 204 (14) Cash used for operating working capital (12,845) (19,249) Other (4,185) (754) Total from operating activities 56,013 40,988 Cash flows from investing activities: Capital expenditures (21,915) (24,260) Payments for acquisitions (161,424) (10,086) Proceeds from divestitures 2,580 6,029 Proceeds from disposition of capital assets 3,540 961 Proceeds from the sale of equity investments - - Total used for investing activities (177,219) (27,356) Cash flows from financing activities: Equity: Dividends paid (16,884) (16,882) Reacquisition of shares (42) (6,150) Stock options exercised 1,041 3,293 Net Equity (15,885) (19,739) Debt: Proceeds from issuance of long-term debt 283,179 - Repayments of long-term debt (75,164) (8,815) Net (decrease)increase in short-term debt (81,133) 10,222 Net Debt 126,882 1,407 Total from financing activities (110,997) (18,332) Effect of exchange rate on cash and cash equivalents 87 (39) Decrease in cash and cash equivalents (10,122) (4,739) Cash and cash equivalents at beginning of period 12,592 49,104 Cash and cash equivalents at end of period $ 2,470 $ 44,365 Detail of Cash (Used for) Provided From Operating Working Capital: Accounts receivable $(21,075) $(23,226) Inventories 8,777 (5,133) Other current assets (4,607) (1,885) Accounts payable 9,815 11,616 Accrued liabilities (2,528) (2,000) U.S. and foreign taxes on income (3,227) 1,379 Total $(12,845) $(19,249) Supplemental disclosure of cash flow information: Interest paid $ 17,039 $ 16,183 Income taxes paid 24,269 26,930 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. Significant changes in the balance sheet since December 31, 1993 are from the Mark Controls and ELDEC acquisitions in 1994. 3. Sales and operating profit by segment are as follows:
Periods Ended September 30, Three Months Nine Months 1994 1993 1994 1993 (In thousands) Net Sales: Fluid Handling $ 81,921 $ 47,719 $226,698 $149,059 Aerospace 46,413 24,378 113,936 79,415 Engineered Materials 50,975 37,925 153,543 119,803 Crane Controls 27,642 8,323 59,039 26,843 Merchandising Systems 42,883 39,824 119,482 131,677 Wholesale Distribution 203,193 180,440 543,937 486,812 Other 2,478 4,364 9,763 10,388 Intersegment Elimination (4,397) (5,049) (14,856) (16,067) Total $451,108 $337,924 $1,211,542 $987,930 Operating Profit (Loss): Fluid Handling $ 5,866 $ 1,566 $ 13,750 $ 5,512 Aerospace 9,522 6,950 20,500 24,005 Engineered Materials 6,111 4,018 18,534 10,197 Crane Controls 1,697 147 3,759 695 Merchandising Systems 5,275 4,948 16,274 19,840 Wholesale Distribution 6,835 6,803 12,686 14,124 Other (427) 695 (528) 1,182 Corporate (2,517) (3,114) (8,759) (9,268) Intersegment Elimination 119 137 16 177 Total $ 32,481 $ 22,150 $ 76,232 $ 66,464 4. Proforma financial information assuming the acquisitions of ELDEC and Mark Controls Corporation had taken place as of the beginning of the nine month periods ended September 30, 1994 and September 30, 1993 is provided below: Nine Months Ended 9/30/94 9/30/93 (in thousands) Net Sales $1,271,632 $1,153,547 Operating Profit 78,311 72,932 Net Income 38,612 35,850 Income Per Share 1.28 1.19 -6-
Part I - Financial Information (Cont'd.) Notes to Consolidated Financial Statements 5. Crane Co. (The company) is still in the process of evaluating the allocation of purchase price to certain assets and contingent liabilities for the following acquisitions as of 9/30/94 because all the information necessary for these valuations is not available.
Acquisition Date Burks Pumps 12/29/93 ELDEC 03/18/94 Mark Controls 04/27/94 The company plans to complete the allocation within a year and believes any adjustment to its preliminary allocations of purchase price will be immaterial to the financial statements. 6. 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 $96,000. 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 -7-
Part I - Financial Information (Cont'd) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Three and Nine Months Ended September 30, 1994 and 1993 [CAPTION] Results From Operations: Third Quarter of 1994 Compared to Third Quarter of 1993: Net income for the quarter ended September 30, 1994 was $16.0 million or $.53 per share, up 25 percent from the $12.8 million and $.42 per share reported in the same period last year. Sales in the third quarter were $451.1 million, up 34 percent from $337.9 million last year, and operating profit increased 47 percent to $32.5 million. Sales and operating profit in the Fluid Handling segment were up sharply for the third quarter compared to prior year due to the Burks Pumps and Mark Controls acquisitions, and because of improved sales and operating performance in the North American and United Kingdom valve businesses. Aerospace segment sales were up for the three month period due to the March 1994 acquisition of ELDEC which more than offset sales declines at Hydro-Aire and Lear Romec. Similarly, operating profit increased in the quarter as ELDEC results more than offset declines at Hydro-Aire and Lear Romec. Higher sales and operating profit in the Engineered Materials business for the three month period are largely due to results at Kemlite. The October 1993 acquisition of Filon, and a very strong market in transportation and recreational vehicles have both contributed to Kemlite's performance. Crane Plumbing contributed marginally to the favorable sales and operating profit comparisons for the third quarter. Cortec and Resistoflex results were lower in the three month period. Crane Controls sales and operating profit improvement in the three month period compared to the prior year is due to the inclusion of the controls products businesses acquired as part of Mark Controls in April 1994. Ferguson's operating was comparable to the prior year. Merchandising Systems operating profit in the third quarter was up 7% on an 8% increase in sales, with most of the improvement coming at National Vendors. Domestic shipments are stronger, as new product introductions continue to increase market share, but European market conditions remain weak. -8- Part I - Financial Information (Cont'd) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Three and Nine Months Ended September 30, 1994 and 1993 [CAPTION] Results From Operations: Wholesale Distribution sales were up for the three month period due to acquisitions and improvement in the markets served by Huttig Sash and Door. Operating profit was flat as a poor performance at Huttig manufacturing operations and a few Huttig branches as well as unfavorable price trends for commodity millwork products offset the higher sales volume. Crane Supply sales and operating profit have increased slightly from the prior year. Interest expense increased $5.5 million due to debt financed acquisitions. The effective tax rate decreased to 38.3% in the third quarter of 1994 compared to 39.4% in 1993 due to a $.4 million tax refund received in the third quarter of 1994. -9- Part I - Financial Information (Cont'd) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Three and Nine Months Ended September 30, 1994 and 1993 [CAPTION] Results From Operations: Nine Months Ended September 30, 1994 Compared to Nine Months Ended September 30, 1993: For the nine month period, net income this year of $39.1 million or $1.30 per share was virtually identical to last year on a sales increase of 23 percent to $1.2 billion. For nine months, operating profit was up 15 percent to $76.2 million. Fluid Handling operating profit increased $8.2 million for the nine month period on sales of $226.7 million compared to 1993 due to the Burks Pumps and Mark Controls acquisitions. The integration of Deming and Burks into Crane Pumps and Systems is proceeding according to plan, and actions to improve sales and operating performance at the combined Crane and Mark Controls valve operations are showing positive results. Aerospace segment sales were up 44 percent to $113.9 million in the nine month period compared to 1993 and were due to the acquisition of ELDEC. Operating profit was down 15 percent to $20.5 million in the nine month period. The ELDEC results, which were included for only six months this year, were not sufficient to offset the effect of the unfavorable comparisons at the other units. The ELDEC acquisition continues to meet Crane's expectations. Engineered Materials operating profit increased by 82 percent to $18.5 million in the nine months compared to 1993 on sales of $153.5 million an increase of 28 percent. The improved performance was due mainly to the Filon acquisition and a very strong transportation and recreational vehicle market. Crane Controls reported operating profit of $3.8 million compared to .7 million in 1993 on sales of $59 million during the nine month period due mainly to the Mark Controls acquisition. Merchandising Systems sales were $119.5 million down $12.2 million from last year. Operating profit of $16.2 million decreased 18% from 1993 due to the absence of business with the Post Office this year at National Vendors, and the impact of a weak European economy on both National Vendors and NRI. -10- Part I - Financial Information (Cont'd) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Three and Nine Months Ended September 30, 1994 and 1993 [CAPTION] Results From Operations: Wholesale Distribution reported earnings of $12.7 million, compared to $14.1 million in 1993. All three operating units Huttig, Crane Supply and Valve Systems had lower results. Huttig was down the most due to poor results at its manufacturing operations, a few problem branches and unfavorable price trends for commodity millwork products. Net interest expense increased $9.3 million in the first nine months of 1994 due to debt financed acquisitions partially offset by interest on a refund of taxes paid in prior periods. The effective tax rate increased to 38.5% in 1994 from 37.3% in 1993. The increase was the result of an increase in non-tax deductible goodwill on acquisitions and higher foreign losses with no tax benefit. -11- Part I - Financial Information (Cont'd) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Three and Nine Months Ended September 30, 1994 and 1993 [CAPTION] Liquidity and Capital Resources: During the first nine months of 1994 the company generated $56.0 million of cash from operating activities, compared to $41.0 million in 1993. Net debt totaled 57 percent of capital at September 30, 1994. The current ratio of 2.1 remained the same as last year with working capital totaling $260 million and $212 million in 1994 and 1993, respectively. Interest coverage as a result of recent acquisitions declined to 4.7, compared to 8.4 at September 30, 1994. The company had unused credit lines of $322 million at September 30, 1994. The $281 million increase in long term debt from December 31, 1993 is explained below and was used primarily to finance acquisitions. [CAPTION] Principal Rate [S] [C] [C] Notes Due 1999 150,000,000 7.25% Domestic Revolving Credit Agreement 100,000,000 4.68% Miscellaneous Foreign Revolving Credit Agreements 31,000,000 6.75%-6.94% -12- Part II - Other Information Item 6. Exhibits and Reports on Form 8-K 11. Computation of earnings per share for the quarters and nine months ended September 30, 1994 and 1993. 27. Article 5 of Regulation S-X Financial Data Schedule for the third quarter. -13- 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 November 11, 1994 By D.S. SMITH D.S. SMITH Vice President-Finance and Chief Financial Officer Date November 11, 1994 By M.L. RAITHEL M.L. RAITHEL Controller -14- Crane Co. and Subsidiaries Exhibit A to Form 10-Q Computation of Net Income per Common Share Three Months and Nine Months ended September 30, 1994 and 1993 (In Thousands, Except Per Share Amounts)
Periods Ended September 30, Three Months Nine Months 1994 1993 1994 1993 Primary Net Income Per Share: Net income available to shareholders $16,002 $12,762 $39,077 $39,254 Average primary shares outstanding 30,219 30,294 30,129 30,233 Net income $.53 $.42 $1.30 $1.30 Fully Diluted - Income Per Share: Net income $16,002 $12,762 $39,077 $39,254 Add back interest, net of tax, assuming the conversion of debentures - 6 12 20 Net income available to shareholders, assuming the conversion of debentures $16,002 $12,768 $39,089 $39,274 Average primary shares outstanding 30,219 30,294 30,129 30,233 Add: Adjustment for further dilutive effect of stock options (ending market price higher than average market price used in primary shares calculation) - 12 - 11 Shares reserved for conversion of debentures 178 117 191 Average fully diluted shares outstanding 30,219 30,484 30,246 30,435 Net income $.53 $.42 $1.29 $1.29
-15- EX-27 2 ARTICLE 5 FDS FOR 3RD QUARTER 10-Q
5 1,000 9-MOS DEC-31-1994 SEP-30-1994 2,470 49 245,778 0 244,314 506,210 524,297 246,166 1,047,300 246,011 0 30,102 0 0 288,586 1,047,300 1,211,542 1,211,542 924,329 1,135,310 (1,355) 1,326 14,054 63,533 24,456 39,077 0 0 0 39,077 1.30 1.29
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