8-K

U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 24, 2003

CRANE CO.

(Exact name of registrant as specified in its charter)

DELAWARE

(State or other jurisdiction of incorporation)

1-1657	13-1952290
(Commission File Number)	(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

N/A

(Former name or former address, if changed since last report)

INFORMATION TO BE INCLUDED IN THE REPORT

ITEM 9.     REGULATION FD DISCLOSURE

This information is being furnished pursuant to “Item 12. Results of Operations and Financial Condition” of Form 8-K in accordance with interim guidance provided by the SEC on March 27, 2003 in SEC Release No. 33-8216.

On July 24, 2003, Crane Co. announced its results of operations for the quarter ended June 30, 2003. A copy of the related press release is being furnished as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference in its entirety. In addition, a copy of the Crane Co. Quarterly Financial Data Supplement for the quarter ended June 30, 2003 is being furnished as Exhibit 99.2 to this Form 8-K and is incorporated herein by reference in its entirety.

The information is furnished under Item 12 of this Current Report on Form 8-K, including Exhibit 99.1 and Exhibit 99.2, and is not deemed to be “filed” for purposes of the Securities Exchange Act of 1934, as amended.

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.

/S/    GEORGE S. SCIMONE

George S. Scimone

Vice President, Finance

and Chief Financial Officer

Date: July 24, 2003

EXHIBIT INDEX

Exhibit Number
99.1	Press Release, dated July 24, 2003, issued by Crane Co.
99.2	Crane Co. Quarterly Financial Data Supplement for the quarter ended June 30, 2003.

EX-99.1

Exhibit 99.1

Contact:

Pamela J.S. Styles

Director, Investor Relations

    and Strategic Planning

203-363-7352

www.craneco.com

Crane Co. Reports Second Quarter Results of $0.44 per Share and

Reaffirms Full Year Earnings Guidance of $1.65—$1.75 per Share

STAMFORD, CONNECTICUT – July 24, 2003—Crane Co. (NYSE: CR) today reported second quarter 2003 net income of $26.0 million, or $0.44 per share, in line with previous guidance and even with second quarter 2002 net income of $26.6 million, or $0.44 per share.

Operating profit was $42.9 million on sales of $406.0 million for the second quarter 2003 compared to operating profit of $43.3 million on sales of $391.6 million for the second quarter 2002. Second quarter 2003 operating profit reflected strong Aerospace & Electronics Segment performance, while all other segments were down slightly from the 2002 second quarter.

Year-to-date through the second quarter, 2003 operating profit was $71.1 million on sales of $782.4 million, compared to operating profit of $80.1 million on sales of $763.2 million for the prior year period. Lower operating results are attributable to market weakness in the Fluid Handling, Merchandising Systems, and Controls Segments that more than offset improved operating results in the Aerospace & Electronics, and Engineered Materials Segments. Included in the $9.0 million operating profit decline were $4.6 million in increased severance costs and increased pension cost of $3.6 million in 2003 versus 2002. Year-to-date 2003 net income was $42.5 million, or $0.72 per share, as compared to income before cumulative effect of a change in accounting principle for goodwill in the first half of 2002 of $47.4 million, or $0.79 per share.

Acquisitions

The Company announced the completion of two significant acquisitions in the quarter, both cash purchases. The acquisition of Signal Technology Corporation (“STC”), completed at the end of May for approximately $138 million net of STC cash acquired, augments the Company’s position in the defense electronics market, and STC now comprises part of the Electronics Group within the Crane Aerospace & Electronics Segment. The pipe coupling and fittings businesses acquired from Etex Group S.A., in mid-June for approximately $29 million are now part of the Company’s U.K.-based valves and fittings business. Acquisition of these businesses extends Crane’s market reach into the gas and water markets through the acquired branded products Victaulic (UK market only), Viking Johnson, Helden and Wask.

Market Conditions

The Aerospace & Electronics Segment experienced increased government and military demand for traditional aerospace components, defense electronics and power supplies, which more than offset weakness in commercial aerospace. For the Engineered Materials Segment, a slowdown in the recreational vehicle (“RV”) market was partially offset by stronger orders for fiberglass reinforced plastic panels in the transportation market during the quarter. Demand remained depressed in the U.S. vending and Euro coin changing equipment markets for Merchandising Systems. Fluid Handling continued to experience weakness in the chemical process industry, power, marine and general industrial markets.

Financial Position

Net debt to capital was 33.9% at June 30, 2003 compared to 24.2% at March 31, 2003 and 27.5% at June 30, 2002, reflecting $136.7 million in net increased borrowings for acquisitions in the second quarter of 2003. During the quarter, the Company generated $30.8 million in cash flow from operating activities and $18.2 million in free cash flow (cash flow

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from operating activities, less dividends and capital expenditures), invested $168.8 million for acquisitions and $6.6 million in capital expenditures, and paid a $5.9 million dividend to shareholders.

On July 22^nd, the Company entered into a new four-year senior unsecured revolving credit facility for $300 million, replacing a revolving credit agreement for a like amount which was due to expire in November of this year.

Order backlog at June 30, 2003 totaled $482.0 million versus $397.8 million at March 31, 2003 and $385.7 million at December 31, 2002, almost entirely due to $82 million in additional backlog from acquired businesses in the second quarter of 2003.

Segment Results

Aerospace & Electronics sales of $104.1 million increased $17.9 million, or 21%, in the second quarter of 2003 compared to the second quarter of 2002 as a result of the May 2003 STC and the November 2002 General Technology Corporation (“GTC”) acquisitions. Operating profit of $23.3 million increased $2.9 million, or 14%, compared to the second quarter of 2002. The STC and GTC acquisitions accounted for approximately 70% of the operating profit increase. Operating profit margins were 22.4% in the 2003 second quarter compared to 23.7% in the prior year quarter, reflecting recent defense electronics related acquisitions whose margins are currently lower than the Company’s existing businesses.

Sales in Crane’s Aerospace Group (Hydro-Aire/Lear Romec, Eldec Aerospace and Resistoflex Aerospace) were down 1% in the quarter versus the prior year second quarter, while operating profit increased 1%. Operating profit margins improved to 25.6% from 25.0% in the prior year quarter. Increased government and military sales driven by U.S. government replenishment of spare parts were offset by lower sales in the weak commercial and general aviation markets. Operating profit improvements were driven by increased government/military volumes as well as from lower headcount and other cost savings initiatives.

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Sales in Crane’s Electronics Group (Interpoint, Eldec Power Supply, GTC and STC), increased 92% to $39.2 million in the 2003 second quarter from $20.5 million in the prior year quarter principally reflecting the GTC and STC acquisitions. Second quarter 2003 sales included $7.0 million from GTC, and $10.8 million representing one month’s sales from STC, acquired in late May 2003. Business unit sales, excluding the acquisitions, increased 4% and operating profit increased 16% from demand for power supplies. Operating profit margins declined to 16.8% during the 2003 second quarter from 19.1% in the prior year quarter due to the lower margin GTC and STC businesses whose combined margins were 11.7%, as the Company has not yet realized STC synergies. Business operating margins, excluding the acquisitions, were 21.1%.

The Aerospace & Electronics Segment backlog was $305.0 million at June 30, 2003, an increase of $80.5 million, or 36%, compared to $224.5 million at March 31, 2003, primarily as a result of the STC acquisition. Backlog for government and military aerospace orders increased in the quarter, partially offsetting a commercial and general aviation decline, and change in customer order practices to reduce lead times.

The Company expects the commercial aerospace market to remain weak in 2003. However, increased military demand for traditional aerospace components and incremental sales from the STC acquisition, heavily comprised of defense electronics, are expected to more than offset these weaknesses. Management now expects Aerospace & Electronics Segment full year 2003 operating profit to be 10% to 20% higher than 2002, upgrading from prior guidance of a 5% reduction from 2002.

Engineered Materials sales of $58.3 million decreased $1.8 million, or 3%, in the 2003 second quarter compared to the second quarter of 2002. On a comparable basis, sales decreased 5% excluding Lasco, acquired in May 2002, and Cor Tec which was divested in the third quarter of 2002. Segment operating profit of $11.7 million in the 2003 second quarter decreased $0.6

4

million, or 5%, compared to the second quarter of 2002. The decrease in operating profit was driven by unfavorable mix due to demand softness in the recreational vehicle (“RV”) market, while demand for fiberglass reinforced panel sales to the truck trailer and building products markets was above the prior year quarter. In addition, Kemlite experienced higher styrene and resin costs in the second quarter of 2003. Operating profit margins were down slightly from the prior year quarter. Backlog at June 30, 2003 was $11.1 million, a 13% improvement compared to $9.8 million at March 31, 2003.

Management expects the RV market to further soften in the second half of 2003, reflecting recent downwardly revised RV industry growth projections. However, it expects the truck trailer transportation market to continue to improve in 2003 and raw material costs for styrene and resins to stabilize in contrast to previously anticipated increases. Consequently, management is revising its full year 2003 operating profit expectation for Engineered Materials to an increase of 5% to 10% above 2002 versus prior guidance of a 10% increase.

Merchandising Systems sales of $39.9 million in the second quarter of 2003 declined $1.4 million, or 3%, compared to the second quarter of 2002. Segment operating profit of $1.3 million decreased $0.7 million compared to the second quarter of 2002. Operating profit margins in the 2003 second quarter were 3.3%, down from 4.9% in the prior year quarter. The decrease reflects continued weak market demand for vending machines in North America and Continental Europe as well as for European coin changing equipment from NRI, which offset cost savings realized from severance actions in the NRI business in the first quarter 2003. Backlog at June 30, 2003 was $11.8 million, a 12% improvement compared to $10.5 million at March 31, 2003.

End-market demand in the automated merchandising market continues to remain weak in the U.S. and in Europe. Consequently management is revising its full year 2003 operating profit

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expectation for Merchandising Systems to be below prior year performance from previous guidance of a modest improvement versus 2002.

Fluid Handling sales were $187.8 million and operating profit was $13.7 million in the quarter, both essentially even with the second quarter of 2002, with margins at 7.3%. Valve sales improved 1.4% from the prior year quarter on strong demand for Valve Services and Crane Process Flow Technology products, partially offset by continued weakness in the Chemical Process Industry (“CPI”), power, marine and general industrial markets, while margins declined to 6.4% from 8.0% in the second quarter of 2002. Sales in the pump business were even with the 2002 second quarter while operating profit improved 43%, resulting in improved margins of 14.1% from 9.9% in the prior year quarter. These improvements reflect progress in the use of a low-cost manufacturing facility in China, as well as benefits from the divestiture of its Chempump business earlier this year. Crane Supply sales declined 4%, while operating profit improved 6%, as the weakened Canadian economy and industrial demand was more than offset by cost savings initiatives. Resistoflex Industrial sales increased 7% and operating profit increased $0.9 million in the 2003 second quarter with margins of 7.9% versus margins of less than 1% in the prior year quarter, from stronger international sales and savings realized from the facility consolidation. Backlog for the Fluid Handling segment at June 30, 2003 was $140.7 million, a 2% improvement compared to $138.1 million at March 31, 2003.

The Fluid Handling businesses continued to experience weak end markets. The segment has begun to realize benefits from utilization of low-cost manufacturing facilities and plant consolidations, which are expected to continue in the second half of the year. Closure and severance costs associated with additional facility closings, in addition to declining end markets, are anticipated to negatively affect Fluid Handling operating profit in the second half of 2003. Management now expects full year 2003 Fluid Handling Segment operating profit to reflect a 10% to 15% improvement over 2002 compared to prior guidance of a 15% to 20% improvement.

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Controls sales were $16.0 million in the second quarter of 2003 versus $16.8 million in the prior year quarter. Operating profit of $1.0 million decreased $0.3 million, or 21%, from the second quarter of 2002. Operating profit margins were 6.2%, down from 7.4% in the prior year quarter. Flat sales at Barksdale were offset by lower shipments at Azonix/Dynalco due to continued weakness in the gas transmission market. The operating profit decrease resulted from both lower sales volumes and increased spending for new product applications. Backlog was $13.5 million as of June 30, 2003, a 9% decrease from $14.7 million at March 31, 2003.

As a result of the weak gas transmission business and higher spending for investment in new product applications, management expects full year 2003 operating profit from Controls to be below prior year 2002 performance.

Corporate expenses were $8.0 million in the second quarter of 2003 versus $6.5 million in the second quarter of 2002, due to increased pension, medical and other employee-related costs.

Outlook for Third Quarter and Full Year 2003

The Company expects third quarter earnings per share to be in the range of $0.42 to $0.47. During the third quarter, improvements in operating efficiencies and continuing benefit realization from low-cost manufacturing locations at Fluid Handling, full-quarter effects of recent acquisitions in both Fluid Handling and Aerospace & Electronics, and strengthening Aerospace & Electronics Segment performance are expected to offset anticipated weaker results in Engineered Materials, Merchandising Systems and Controls.

The Company is maintaining its full year 2003 operating profit guidance range of $160 to $170 million which results in earnings per share guidance of $1.65 to $1.75, including the second quarter 2003 acquisitions. The incremental sales from the acquisitions of Signal Technology

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Corporation and certain product lines of Etex are expected to offset effects of the challenging market environment in Fluid Handling, particularly in the Chemical Process Industry and short cycle businesses, and Merchandising Systems, as well as revised RV industry production forecasts on Engineered Materials.

Free cash flow (cash flow from operating activities, less dividends and capital expenditures) expectations continue to be approximately $120 million in 2003. The Company plans to continue its focus on the efficient utilization of capital and is well positioned to take advantage of strategic acquisition opportunities.

Conference Call

Crane Co. has scheduled a conference call to discuss the second quarter’s financial results on Friday, July 25^th, 2003 at 10:00 A.M. (Eastern). All interested parties may listen to a live webcast of the call at http://www.craneco.com. An archived webcast will also be available to replay this conference call directly from the Company’s website.

Crane Co. is a diversified manufacturer of engineered industrial products. Crane Co. is traded on the New York Stock Exchange (NYSE:CR).

This press release may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements present management’s expectations, beliefs, plans and objectives regarding future financial performance, and assumptions or judgments concerning such performance. Any discussions contained in this press release, except to the extent that they contain historical facts, are forward-looking and accordingly involve estimates, assumptions, judgments and uncertainties. There are a number of factors that could cause actual results or outcomes to differ materially from those addressed in the forward-looking statements. Such factors are detailed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002 filed with the Securities and Exchange Commission.

(Financial Tables Follow)

8

EX-99.2

Exhibit 99.2

CRANE CO.

Income Statement Data

(in thousands, except per share data)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2003			2002			2003			2002
Net Sales:
Aerospace & Electronics	$	104,073		$	86,185		$	191,447		$	171,641
Engineered Materials		58,278			60,093			121,164			114,338
Merchandising Systems		39,869			41,222			77,475			84,198
Fluid Handling		187,812			187,350			361,280			360,377
Controls		16,015			16,784			31,225			32,641
Intersegment Elimination		(74	)		(21	)		(148	)		(37	)
Total Net Sales	$	405,973		$	391,613		$	782,443		$	763,158
Operating Profit:
Aerospace & Electronics	$	23,278		$	20,418		$	40,149		$	36,024
Engineered Materials		11,674			12,322			24,638			22,958
Merchandising Systems		1,322			2,030			(796	)		6,407
Fluid Handling		13,697			13,737			21,122			26,098
Controls		986			1,248			1,383			2,043
Corporate		(8,046	)		(6,456	)		(15,406	)		(13,417	)
Total Operating Profit		42,911			43,299			71,090			80,113
Interest Income		309			158			498			608
Interest Expense		(4,141	)		(4,153	)		(8,084	)		(8,644	)
Miscellaneous—Net		(833	)		360			(998	)		(1,372	)
Income Before Income Taxes		38,246			39,664			62,506			70,705
Provision for Income Taxes		12,239			13,101			20,002			23,344
Income Before Cumulative Effect of a Change in Accounting Principle		26,007			26,563			42,504			47,361
Cumulative Effect of a Change in Accounting Principle		—			—			—			(28,076	)
Net Income	$	26,007		$	26,563		$	42,504		$	19,285
Depreciation and Amortization	$	12,848		$	12,372		$	25,212		$	24,374
Per Diluted Share Data:
Income Before Cumulative Effect of a Change in Accounting Principle	$	0.44		$	0.44		$	0.72		$	0.79
Cumulative Effect of a Change in Accounting Principle		—						—			(0.47	)
Net Income	$	0.44		$	0.44		$	0.72		$	0.32
Average Diluted Shares Outstanding		59,394			60,371			59,437			60,270
Average Basic Shares Outstanding		59,287			59,808			59,349			59,791

CRANE CO.

Condensed Balance Sheets

(in thousands)

	June 30,		December 31,
	2003		2002
ASSETS
Current Assets
Cash and Cash Equivalents	$	32,058	$	36,589
Accounts Receivable		261,475		213,850
Inventories		246,323		214,689
Other Current Assets		52,591		44,349
Total Current Assets		592,447		509,477
Property, Plant and Equipment		308,733		273,248
Other Assets		236,731		220,615
Goodwill		511,565		410,356
Total Assets	$	1,649,476	$	1,413,696
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Current Maturities of Long-Term Debt	$	101,332	$	400
Loans Payable		24,119		48,153
Accounts Payable		113,720		91,072
Accrued Liabilities		146,144		125,859
Income Taxes		28,233		22,941
Total Current Liabilities		413,548		288,425
Long-Term Debt		266,374		205,318
Deferred Income Taxes		9,153		8,972
Postretirement, Pension and Other Liabilities		259,971		261,919
Common Shareholders’ Equity		700,430		649,062
Total Liabilities and Shareholders’ Equity	$	1,649,476	$	1,413,696

CRANE CO.

Condensed Statements of Cash Flows

(in thousands)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2003			2002			2003			2002
Operating Activities:
Net income	$	26,007		$	26,563		$	42,504		$	19,285
Cumulative effect of a change in accounting principle		—						—			28,076
Income before accounting change		26,007			26,563			42,504			47,361
(Income) loss from joint venture		(1,164	)		(592	)		(1,535	)		51
Depreciation and amortization		12,848			12,372			25,212			24,374
Cash (used for) provided by operating working capital		(5,332	)		23,117			(9,730	)		16,950
Other		(1,585	)		(3,437	)		(2,873	)		(3,636	)
Total Provided from Operating Activities		30,774			58,023			53,578			85,100
Investing Activities:
Capital expenditures		(6,606	)		(5,898	)		(13,090	)		(12,377	)
Proceeds from disposition of capital assets		567			3,542			911			4,004
Payments for acquisitions, net		(168,818	)		(40,807	)		(168,818	)		(42,457	)
Proceeds from divestitures		400			—			1,600			—
Total Used for Investing Activities		(174,457	)		(43,163	)		(179,397	)		(50,830	)
Financing Activities:
Dividends paid		(5,929	)		(5,982	)		(11,874	)		(11,965	)
Settlement of treasury shares acquired on the open market		(343	)		—			(6,641	)		—
Stock options exercised—net of shares reacquired		187			249			547			987
Issuance (repayment) of debt, net		136,680			(1,833	)		137,712			(24,054	)
Total Provided from (Used for) Financing Activities		130,595			(7,566	)		119,744			(35,032	)
Effect of exchange rate on cash and cash equivalents		889			1,623			1,544			1,485
(Decrease) increase in cash and cash equivalents		(12,199	)		8,917			(4,531	)		723
Cash and cash equivalents at beginning of period		44,257			12,969			36,589			21,163
Cash and cash equivalents at end of period	$	32,058		$	21,886		$	32,058		$	21,886

CRANE CO.

Order Backlog

(in thousands)

	June 30,		March 31,		December 31,		June 30,
	2003		2003		2002		2002
Aerospace & Electronics	$	304,975	$	224,513	$	217,598	$	223,626
Engineered Materials		11,071		9,828		11,153		14,246
Merchandising Systems		11,827		10,543		12,932		16,864
Fluid Handling		140,657		138,134		130,195		140,556
Controls		13,481		14,736		13,784		17,659
Total Backlog	$	482,011	$	397,754	$	385,662	$	412,951

CRANE CO.

Non-GAAP Financial Measures

(in thousands)

	Three Months Ended						Six Months Ended
	June 30,						June 30,						Estimated
	2003			2002			2003			2002			2003
Free Cash Flow
Cash from Operating Activities	$	30,774		$	58,023		$	53,578		$	85,100		$	170,000
Less: Capital Expenditures		(6,606	)		(5,898	)		(13,090	)		(12,377	)		(26,000	)
Dividends		(5,929	)		(5,982	)		(11,874	)		(11,965	)		(24,000	)
Free Cash Flow	$	18,239		$	46,143		$	28,614		$	60,758		$	120,000

Free cash flow is considered a measure of cash generation and should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with generally accepted accounting principles and may be inconsistent with similar measures presented by other companies.

This measurement provides supplemental information to assist management and certain investors in analyzing Company performance.