EX-99.1 2 exhibit991-pressreleasexq2.htm EXHIBIT 99.1 Exhibit

 
 
 
Exhibit 99.1
 
 
 
 
 
 
Crane Co.
 
 
News
 
 
 
 
 
 
 
 
 
Contact:
 
 
 
 
Jason D. Feldman
 
 
 
 
Director, Investor Relations
 
 
 
 
203-363-7329
 
 
 
 
www.craneco.com
 


Crane Co. Reports Second Quarter Results

Second Quarter 2019 Highlights:

•
GAAP earnings per diluted share (EPS) of $1.50 compared to $1.32 in 2018; excluding Special Items, EPS of $1.58 increased 12% compared to last year.
•
Sales of $842 million decreased 1% compared to 2018, with core sales growth of 1%.
•
Updating full-year GAAP EPS guidance to $6.00-$6.20 vs. prior range of $6.05-$6.25; excluding Special Items, 2019 EPS guidance of $6.25-$6.45 remains unchanged.



STAMFORD, CONNECTICUT - July 22, 2019 - Crane Co. (NYSE: CR), a diversified manufacturer of highly engineered industrial products, reported second quarter 2019 GAAP earnings per diluted share (EPS) of $1.50, compared to $1.32 per diluted share in the second quarter of 2018. Excluding Special Items, second quarter 2019 EPS increased 12% to $1.58, compared to $1.41 in the second quarter of 2018. (Please see the attached Non-GAAP Financial Measures tables for a detailed reconciliation of reported results to adjusted measures.)


1

Second quarter 2019 sales were $842 million, a decrease of 1% compared to the second quarter of 2018. The sales decrease was comprised of $16.0 million, or 1.9%, of unfavorable foreign exchange and a $1.5 million, or 0.2%, impact from divestitures, partially offset by $8.1 million, or 1%, increase from core growth.

Second quarter 2019 operating profit was $123 million, an increase of 9% compared to $113 million in the second quarter of 2018. Operating profit margin was 14.6% compared to 13.3% last year. Excluding Special Items, second quarter 2019 operating profit was $132 million, an increase of 9% compared to $121 million in the second quarter of 2018. Excluding Special Items, operating profit margin of 15.6% compared to 14.2% last year. (Please see the attached Non-GAAP Financial Measures tables for a detailed reconciliation of reported results to adjusted measures.)
Max Mitchell, Crane Co. President and Chief Executive Officer commented: "We had another strong quarter with operating results again slightly better than expected. All of our businesses are executing well, and we continue to drive both growth and productivity initiatives across our businesses."
Mr. Mitchell continued: "Our offer to acquire CIRCOR was certainly a notable event during the last quarter. While disappointed with the result, our attempt to acquire CIRCOR should give our investors confidence that we will continue to aggressively pursue acquisitions, yet remain disciplined on valuation. We have a full funnel of opportunities that we will continue to pursue in the quarters ahead, and our rigorous approach to capital deployment remains focused on our three primary growth platforms. We are also firmly committed to, and are executing on, our longstanding strategy as a diversified manufacturer of highly engineered industrial products with proprietary technology, and deploying the Crane Business System as a competitive differentiator. I am pleased with our results year-to-date, and excited about the organic and inorganic growth opportunities that we have ahead of us."

2



Second Quarter 2019 Segment Results
All comparisons detailed in this section refer to operating results for the second quarter 2019 versus the second quarter 2018.
Fluid Handling

 
 
Second Quarter
 
Change
(dollars in millions)
 
2019
 
2018
 
 
 
 
Sales
 
$
291

 
$
277

 
$
14

 
5
%
 
 
 
 
 
 
 
 
 
Operating Profit
 
$
37

 
$
30

 
$
8

 
26
%
Operating Profit, before Special Items*
 
$
40

 
$
30

 
$
9

 
31
%
 
 
 
 
 
 
 
 
 
Profit Margin
 
12.8
%
 
10.7
%
 
 
 
 
Profit Margin, before Special Items*
 
13.7
%
 
11.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
*Please see the attached Non-GAAP Financial Measures tables
Sales increased $14 million, or 5%, driven by $22 million, or 8%, of core growth, partially offset by $8 million, or 3%, of unfavorable foreign exchange. Operating margin increased to 12.8%, compared to 10.7% last year, primarily reflecting productivity, operating leverage on higher volumes, and repositioning benefits. Excluding Special Items, operating margin increased to 13.7%, a 270 basis point increase compared to 11.0% last year. Fluid Handling order backlog was $275 million at June 30, 2019, $280 million at December 31, 2018, and $292 million at June 30, 2018.

Payment & Merchandising Technologies


3

 
 
Second Quarter
 
Change
(dollars in millions)
 
2019
 
2018
 
 
 
 
Sales
 
$
291

 
$
324

 
$
(33
)
 
(10
%)
 
 
 
 
 
 
 
 
 
Operating Profit
 
$
47

 
$
46

 
$
—

 
1
%
Operating Profit, before Special Items*
 
$
49

 
$
53

 
$
(4
)
 
(7
%)
 
 
 
 
 
 
 
 
 
Profit Margin
 
16.0
%
 
14.2
%
 
 
 
 
Profit Margin, before Special Items*
 
16.9
%
 
16.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
*Please see the attached Non-GAAP Financial Measures tables
 
 
 
 
Sales decreased $33 million, or 10%, driven by $25 million, or 8%, of core decline, $7 million, or 2%, of unfavorable foreign exchange and a $1 million impact from a divestiture. Operating margin improved to 16.0%, from 14.2% last year, primarily reflecting lower acquisition related expenses and benefits from productivity and repositioning, partially offset by the impact of lower volumes. Excluding Special Items, operating margins improved to 16.9% from 16.3% last year.

Aerospace & Electronics

 
 
Second Quarter
 
Change
(dollars in millions)
 
2019
 
2018
 
 
 
 
Sales
 
$
205

 
$
187

 
$
17

 
9
%
 
 
 
 
 
 
 
 
 
Operating Profit
 
$
49

 
$
43

 
$
6

 
14
%
Operating Profit, before Special Items*
 
$
51

 
$
44

 
$
8

 
18
%
 
 
 
 
 
 
 
 
 
Profit Margin
 
24.2
%
 
23.1
%
 
 
 
 
Profit Margin, before Special Items*
 
25.0
%
 
23.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
*Please see the attached Non-GAAP Financial Measures tables
Sales increased $17 million, or 9%, driven by higher core sales. Operating margin improved to 24.2%, from 23.1% last year, primarily reflecting operating leverage on higher volumes. Excluding Special Items, operating margin improved to 25.0%, from 23.2% last year. Aerospace & Electronics' order backlog was $503 million at June 30, 2019, $447 million at December 31, 2018, and $441 million at June 30, 2018.


4

Engineered Materials

 
 
Second Quarter
 
Change
(dollars in millions)
 
2019
 
2018
 
 
 
 
Sales
 
$
56

 
$
63

 
$
(7
)
 
(11
%)
 
 
 
 
 
 
 
 
 
Operating Profit
 
$
8

 
$
11

 
$
(4
)
 
(33
%)
 
 
 
 
 
 
 
 
 
Profit Margin
 
13.5
%
 
17.9
%
 
 
 
 
Sales decreased $7 million, or 11%, driven primarily by lower sales to Recreational Vehicle customers. Operating margin declined to 13.5%, from 17.9%, primarily reflecting lower volumes.

Updating Full Year 2019 Guidance
We are updating our full year 2019 GAAP EPS guidance to a range of $6.00-$6.20 compared to our prior range of $6.05-$6.25 primarily reflecting a small loss on a divestiture, M&A related expenses, and repositioning. Excluding Special Items, full year 2019 EPS guidance of $6.25-$6.45 remains unchanged. Sales for 2019 are expected to be approximately $3.3 billion, reflecting a slight decline in core sales and an unfavorable foreign exchange impact of approximately 2%. Full year 2019 free cash flow (cash provided by operating activities less capital spending) is expected to be in a range of $335 million to $365 million. (Please see the attached Non-GAAP Financial Measures tables.)



Additional Information
Additional information with respect to the Company’s asbestos liability and related accounting provisions and cash requirements is set forth in the Current Report on Form 8-K filed with a copy of this press release.


5

Conference Call
Crane Co. has scheduled a conference call to discuss the second quarter financial results on Tuesday, July 23, 2019 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 under Investors, Events & Presentations. Slides that accompany the conference call will be available on the Company’s website.

Crane Co. is a diversified manufacturer of highly engineered industrial products. Founded in 1855, Crane Co. provides products and solutions to customers in the chemicals, oil & gas, power, automated payment solutions, banknote design and production and aerospace & defense markets, along with a wide range of general industrial and consumer related end markets. The Company has four business segments: Fluid Handling, Payment & Merchandising Technologies, Aerospace & Electronics and Engineered Materials. Crane Co. has approximately 12,000 employees in the Americas, Europe, the Middle East, Asia and Australia. Crane Co. is traded on the New York Stock Exchange (NYSE:CR). For more information, visit www.craneco.com.

This press release may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements are based on the management’s current beliefs, expectations, plans, assumptions and objectives regarding Crane Co.’s future financial performance and are subject to significant risks and uncertainties. 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 these forward-looking statements. Such factors are detailed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and subsequent reports filed with the Securities and Exchange Commission. Such reports are available on the Securities Exchange Commission’s website (www.sec.gov). Crane Co. does not undertake to update any forward-looking statements.



(Financial Tables Follow)

6

CRANE CO.
Income Statement Data
(in millions, except per share data)
 
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
 
 
 
2019
 
 
2018
 
 
2019
 
 
2018
Net sales:
 
 
 
 
 
 
 
 
 
 
 
 
Fluid Handling
 
$
290.6

 
$
276.9

 
$
564.3

 
$
543.5

Payment & Merchandising Technologies
 
 
291.0

 
 
324.3

 
 
594.8

 
 
616.7

Aerospace & Electronics
 
 
204.5

 
 
187.2

 
 
399.1

 
 
357.5

Engineered Materials
 
 
55.5

 
 
62.6

 
 
115.1

 
 
132.3

    Total net sales
 
$
841.6

 
$
851.0

 
$
1,673.3

 
$
1,650.0

 
 
 
 
 
 
 
 
 
 
 
 
 
Operating profit:
 
 
 
 
 
 
 
 
 
 
 
 
Fluid Handling
 
$
37.3

 
$
29.5

 
$
71.4

 
$
57.6

Payment & Merchandising Technologies
 
 
46.5

 
 
46.1

 
 
89.7

 
 
82.6

Aerospace & Electronics
 
 
49.4

 
 
43.3

 
 
94.2

 
 
77.5

Engineered Materials
 
 
7.5

 
 
11.2

 
 
16.9

 
 
23.7

Corporate
 
 
(17.9
)
 
 
(17.1
)
 
 
(35.7
)
 
 
(34.1
)
    Total operating profit
 
 
122.8

 
 
113.0

 
 
236.5

 
 
207.3

 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
 
0.7

 
 
0.4

 
 
1.3

 
 
1.2

Interest expense
 
 
(11.4
)
 
 
(12.8
)
 
 
(23.3
)
 
 
(27.5
)
Miscellaneous, Net
 
 
6.4

 
 
4.3

 
 
8.4

 
 
8.3

Income before income taxes
 
 
118.5

 
 
104.9

 
 
222.9

 
 
189.3

Provision for income taxes
 
 
27.5

 
 
24.2

 
 
49.4

 
 
39.9

Net income before allocation to noncontrolling interests
 
 
91.0

 
 
80.7

 
 
173.5

 
 
149.4

    Less: Noncontrolling interest in subsidiaries' earnings
 
 
—

 
 
—

 
 
0.1

 
 
—

Net income attributable to common shareholders
 
$
91.0

 
$
80.7

 
$
173.4

 
$
149.4

 
 
 
 
 
 
 
 
 
 
 
 
 
Share Data:
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per diluted share
 
$
1.50

 
$
1.32

 
$
2.85

 
$
2.45

 
 
 
 
 
 
 
 
 
 
 
 
 
Average diluted shares outstanding
 
 
60.8

 
 
61.1

 
 
60.8

 
 
61.0

Average basic shares outstanding
 
 
59.9

 
 
59.7

 
 
59.8

 
 
59.7

 
 
 
 
 
 
 
 
 
 
 
 
 
Supplemental Data:
 
 
 
 
 
 
 
 
 
 
 
 
Cost of Sales
 
$
535.0

 
$
545.6

 
$
1,063.0

 
$
1,066.8

Selling, General & Administrative
 
 
183.8

 
 
186.5

 
 
373.8

 
 
364.2

Acquisition & Integration Related Charges *
 
 
2.4

 
 
4.1

 
 
3.5

 
 
9.2

Repositioning Related charges *
 
 
6.4

 
 
1.7

 
 
11.7

 
 
2.5

Depreciation and Amortization *
 
 
28.6

 
 
28.4

 
 
56.3

 
 
56.3

Stock-Based Compensation Expense *
 
 
5.7

 
 
5.6

 
 
11.2

 
 
11.2

 
 
 
 
 
 
 
 
 
 
 
 
 
* For 2019, amounts included within cost of sales and selling, general & administrative costs.
 
 
 
 
 
 
 
 
 
 
 
 
 
Totals may not sum due to rounding
 
 
 
 
 
 
 
 
 
 
 
 

7

CRANE CO.
Condensed Balance Sheets
(in millions)
 
 
 
June 30,
 2019
 
December 31,
2018
ASSETS
 
 
 
 
Current assets
 
 
 
 
Cash and cash equivalents
 
$
307.0

 
$
343.4

Accounts receivable, net
 
543.2

 
515.8

Current insurance receivable - asbestos
 
16.0

 
16.0

Inventories, net
 
430.6

 
411.5

Other current assets
 
83.1

 
76.2

Total current assets
 
1,379.9

 
1,362.9

 
 
 
 
 
Property, plant and equipment, net
 
595.5

 
599.1

Long-term insurance receivable - asbestos
 
67.1

 
75.0

Other assets
 
685.0

 
602.0

Goodwill
 
1,414.3

 
1,403.7

 
 
 
 
 
Total assets
 
$
4,141.8

 
$
4,042.7

 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
Current liabilities
 
 
 
 
Notes payable and current maturities of long-term debt
 
$
7.8

 
$
6.9

Accounts payable
 
275.2

 
329.2

Current asbestos liability
 
66.0

 
66.0

Accrued liabilities
 
281.0

 
337.1

Income taxes
 
4.6

 
1.0

Total current liabilities
 
634.6

 
740.2

 
 
 
 
 
Long-term debt
 
940.3

 
942.3

Long-term deferred tax liability
 
60.3

 
53.2

Long-term asbestos liability
 
425.4

 
451.3

Other liabilities
 
406.8

 
328.6

 
 
 
 
 
Total equity
 
1,674.4

 
1,527.1

 
 
 
 
 
Total liabilities and equity
 
$
4,141.8

 
$
4,042.7


Totals may not sum due to rounding


8

CRANE CO.
Condensed Statements of Cash Flows
(in millions)
 
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
 
2019
 
2018
 
2019
 
2018
Operating activities:
 
 
 
 
 
 
 
 
Net income attributable to common shareholders
 
$
91.0

 
$
80.7

 
$
173.4

 
$
149.4

Noncontrolling interest in subsidiaries' earnings
 
—

 
—

 
0.1

 
—

Net income before allocations to noncontrolling interests
 
91.0

 
80.7

 
173.5

 
149.4

Loss on deconsolidation of joint venture
 
—

 
—

 
1.2

 
—

Unrealized gain on marketable securities
 
(3.1
)
 
—

 
(3.1
)
 
—

Depreciation and amortization
 
28.6

 
28.4

 
56.3

 
56.3

Stock-based compensation expense
 
5.7

 
5.6

 
11.2

 
11.2

Defined benefit plans and postretirement credit
 
(2.0
)
 
(3.8
)
 
(4.0
)
 
(7.7
)
Deferred income taxes
 
5.4

 
(1.7
)
 
10.8

 
11.0

Cash provided by (used for) operating working capital
 
32.0

 
(16.3
)
 
(171.4
)
 
(45.8
)
Defined benefit plans and postretirement contributions
 
(0.8
)
 
(12.0
)
 
(5.1
)
 
(16.5
)
Environmental payments, net of reimbursements
 
(2.4
)
 
(1.9
)
 
(4.0
)
 
(4.2
)
Other
 
6.7

 
10.3

 
5.0

 
12.6

  Subtotal
 
161.1

 
89.3

 
70.4

 
166.3

Asbestos related payments, net of insurance recoveries
 
(8.2
)
 
(32.0
)
 
(17.9
)
 
(34.9
)
  Total provided by operating activities
 
152.9

 
57.3

 
52.5

 
131.4

 
 
 
 
 
 
 
 
 
Investing activities:
 
 
 
 
 
 
 
 
Capital expenditures
 
(16.3
)
 
(16.5
)
 
(36.1
)
 
(44.0
)
Proceeds from disposition of capital assets
 
0.9

 
0.2

 
0.9

 
0.5

Impact of deconsolidation of joint venture
 
—

 
—

 
(0.2
)
 
—

Purchase of marketable securities
 
(8.8
)
 
—

 
(8.8
)
 
—

Payments for acquisitions, net of cash acquired
 
—

 
—

 
—

 
(672.3
)
 Total used for investing activities
 
(24.2
)
 
(16.3
)
 
(44.2
)
 
(715.8
)
 
 
 
 
 
 
 
 
 
Financing activities:
 
 
 
 
 
 
 
 
Dividends paid
 
(23.3
)
 
(20.9
)
 
(46.7
)
 
(41.8
)
Reacquisition of shares on open market
 
—

 
(25.0
)
 
—

 
(25.0
)
Stock options exercised, net of shares reacquired
 
1.6

 
0.5

 
1.2

 
5.0

Debt issuance costs
 
—

 
—

 
—

 
(5.4
)
Repayment of long-term debt
 
(1.4
)
 
(200.0
)
 
(2.8
)
 
(450.0
)
Repayment of short-term debt
 
—

 
—

 
—

 
(100.0
)
Proceeds from issuance of long-term debt
 
—

 
—

 
3.0

 
550.0

Proceeds from issuance of short-term debt
 
—

 
—

 
—

 
100.0

(Repayment of) proceeds from issuance of commercial paper, net
 
(55.5
)
 
(101.3
)
 
—

 
171.4

 Total (used for) provided by financing activities
 
(78.6
)
 
(346.7
)
 
(45.3
)
 
204.2

 
 
 
 
 
 
 
 
 
Effect of exchange rate on cash and cash equivalents
 
0.1

 
(18.4
)
 
0.6

 
(7.8
)
Increase (decrease) in cash and cash equivalents
 
50.2

 
(324.1
)
 
(36.4
)
 
(388.0
)
Cash and cash equivalents at beginning of period
 
256.8

 
642.3

 
343.4

 
706.2

Cash and cash equivalents at end of period
 
$
307.0

 
$
318.2

 
$
307.0

 
$
318.2


Totals may not sum due to rounding

9

CRANE CO.
Order Backlog
(in millions)
 
 
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
Fluid Handling
 
$
274.9

 
$
284.8

 
$
279.6

 
$
297.7

 
$
291.6

Payment & Merchandising Technologies
 
286.8

 
322.2

 
331.5

 
359.0

 
350.5

Aerospace & Electronics
 
502.8

 
487.1

 
446.6

 
445.1

 
441.3

Engineered Materials
 
11.5

 
12.3

 
14.9

 
10.3

 
13.2

    Total Backlog
 
$
1,076.0

 
$
1,106.4

 
$
1,072.6

 
$
1,112.1

 
$
1,096.6


Totals may not sum due to rounding


10

CRANE CO.
Non-GAAP Financial Measures
(in millions, except per share data)
 
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
Percent Change
June 30, 2019
 
 
 
2019
 
2018
 
2019
 
2018
 
Three Months
 
Six Months
INCOME ITEMS
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Sales
 
 
$
841.6

 
$
851.0

 
$
1,673.3

 
$
1,650.0

 
(1.1
)%
 
1.4
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Profit
 
 
122.8

 
113.0

 
236.5

 
207.3

 
8.7
 %
 
14.1
%
Percentage of Sales
 
 
14.6
%
 
13.3
%
 
14.1
%
 
12.6
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Special Items impacting Operating Profit:
 
 
 
 
 
 
 
 
 
 
 
 
 
Inventory step-up and backlog amortization
 
 
—

 
1.9

 
—

 
8.5

 
 
 
 
Acquisition & Integration Related Charges
 
 
2.4

 
4.1

 
3.5

 
9.2

 
 
 
 
Repositioning Related charges
 
 
6.4

 
1.7

 
11.7

 
2.5

 
 
 
 
Operating Profit before Special Items
 
 
$
131.6

 
$
120.7

 
$
251.7

 
$
227.5

 
9.0
 %
 
10.6
%
Percentage of Sales
 
 
15.6
%
 
14.2
%
 
15.0
%
 
13.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Income Attributable to Common Shareholders
 
 
$
91.0

 
$
80.7

 
$
173.4

 
$
149.4

 
 
 
 
Per Share
 
 
$
1.50

 
$
1.32

 
$
2.85

 
$
2.45

 
13.4
 %
 
16.5
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Special Items Impacting Net Income Attributable to Common Shareholders:
 
 
 
 
 
 
 
 
 
 
 
 
 
Inventory step-up and backlog amortization - Net of Tax
 
 
—

 
1.4

 
—

 
6.5

 
 
 
 
Per Share
 
 
 
 
$
0.02

 
 
 
$
0.11

 
 
 
 
Acquisition & Integration Related Charges - Net of Tax
 
 
1.6

 
2.9

 
2.5

 
6.9

 
 
 
 
Per Share
 
 
$
0.03

 
$
0.05

 
$
0.04

 
$
0.11

 
 
 
 
Repositioning Related Charges - Net of Tax
 
 
6.1

 
1.3

 
10.3

 
1.9

 
 
 
 
Per Share
 
 
$
0.10

 
$
0.02

 
$
0.17

 
$
0.03

 
 
 
 
Unrealized gain on marketable securities - Net of Tax
 
 
(2.5
)
 
—

 
(2.5
)
 
—

 
 
 
 
Per Share
 
 
$
(0.04
)
 
 
 
$
(0.04
)
 
 
 
 
 
 
Incremental financing costs associated with acquisition - Net of Tax
 
 
—

 
0.7

 
—

 
2.1

 
 
 
 
Per Share
 
 
 
 
$
0.01

 
 
 
$
0.03

 
 
 
 
Deconsolidation of joint venture - Net of Tax
 
 
—

 
—

 
0.8

 
—

 
 
 
 
Per Share
 
 
 
 
 
 
$
0.01

 


 
 
 
 
Impact of Tax Law Change
 
 
—

 
(0.8
)
 
—

 
(0.5
)
 
 
 
 
Per Share
 
 
 
 
$
(0.01
)
 
 
 
$
(0.01
)
 
 
 
 
Net Income Attributable To Common Shareholders Before Special Items
 
 
$
96.2

 
$
86.2

 
$
184.5

 
$
166.3

 
11.6
 %
 
10.9
%
Per Diluted Share
 
 
$
1.58

 
$
1.41

 
$
3.04

 
$
2.73

 
12.2
 %
 
11.4
%

 
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
 
 
2019
 
2018
 
2019
 
2018
Special Items Impacting Provision for Income Taxes
 
 
 
 
 
 
 
 
 
Provision for Income Taxes - GAAP Basis
 
 
$
27.5

 
$
24.2

 
$
49.4

 
$
39.9

Tax effect of Inventory step-up and backlog amortization
 
 
—

 
0.4

 
—

 
2.0

Tax effect of Acquisition & Integration Related Charges
 
 
0.8

 
1.0

 
1.0

 
2.2

Tax effect of Repositioning Related Charges
 
 
0.3

 
0.4

 
1.4

 
0.6

Tax effect of Unrealized gain on marketable securities
 
 
(0.7
)
 
—

 
(0.7
)
 
—

Tax effect of Incremental financing costs associated with acquisition
 
 
—

 
0.2

 
—

 
0.6

Tax effect of Deconsolidation of joint venture
 
 
—

 
—

 
0.4

 
—

Impact of Tax Law Change
 
 
—

 
0.8

 
—

 
0.5

Provision for Income Taxes - non-GAAP Basis
 
 
$
27.9

 
$
27.0

 
$
51.5

 
$
45.8


Totals may not sum due to rounding

11


SEGMENT INFORMATION:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the three months ended June 30, 2019
 
 
Fluid Handling
 
Payment & Merchandising Technologies
 
Aerospace & Electronics
 
Engineered Materials
 
Corporate
 
Total Company
Net sales
 
$
290.6

 
$
291.0

 
$
204.5

 
$
55.5

 
$
—

 
$
841.6

 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Profit - GAAP
 
37.3

 
46.5

 
49.4

 
7.5

 
(17.9
)
 
122.8

Acquisition & Integration Related Charges
 
—

 
0.4

 
—

 
—

 
2.0

 
2.4

Repositioning Related charges
 
2.5

 
2.2

 
1.7

 
—

 
—

 
6.4

Operating Profit before Special Items
 
$
39.8

 
$
49.1

 
$
51.1

 
$
7.5

 
$
(15.9
)
 
$
131.6

Percentage of Sales
 
13.7
%
 
16.9
%
 
25.0
%
 
13.5
%
 
 
 
15.6
%


 
 
For the three months ended June 30, 2018
 
 
Fluid Handling
 
Payment & Merchandising Technologies
 
Aerospace & Electronics
 
Engineered Materials
 
Corporate
 
Total Company
Net Sales
 
$
276.9

 
$
324.3

 
$
187.2

 
$
62.6

 
$
—

 
$
851.0

 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Profit - GAAP
 
29.5

 
46.1

 
43.3

 
11.2

 
(17.1
)
 
113.0

Inventory step-up and backlog amortization
 
0.1

 
1.8

 
—

 
—

 
—

 
1.9

Acquisition & Integration Related Charges
 
—

 
4.1

 
—

 
—

 
—

 
4.1

Repositioning Related charges
 
0.8

 
0.7

 
0.2

 
—

 
—

 
1.7

Operating Profit before Special Items
 
$
30.4

 
$
52.7

 
$
43.5

 
$
11.2

 
$
(17.1
)
 
$
120.7

Percentage of Sales
 
11.0
%
 
16.3
%
 
23.2
%
 
17.9
%
 
 
 
14.2
%

Totals may not sum due to rounding


12

CRANE CO.
Guidance
(in millions, except per share data)

 
 
2019 Full Year Guidance
2019 Earnings Per Share Guidance
 
Low
 
High
 
 
 
 
 
Earnings Per Share - GAAP basis
 
$
6.00

 
$
6.20

Repositioning Costs
 
0.18

 
0.18

M&A Related, net
 
0.07

 
0.07

Earnings Per Share - Non-GAAP basis
 
$
6.25

 
$
6.45

CASH FLOW ITEMS
 
 
Three Months Ended
June 30,
 
Six Months Ended June 30,
 
 
2019 Full Year Guidance
 
 
2019
 
2018
 
2019
 
2018
 
 
Low
 
High
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash Provided by Operating Activities
 before Asbestos-Related Payments
 
$
161.1

 
$
89.3

 
$
70.4

 
$
166.3

 
 
$
475.0

 
$
505.0

Asbestos-related payments, net of insurance recoveries
 
(8.2
)
 
(32.0
)
 
(17.9
)
 
(34.9
)
 
 
(50.0
)
 
(50.0
)
Cash Provided by Operating Activities
 
152.9

 
57.3

 
52.5

 
131.4

 
 
425.0

 
455.0

Less: Capital Expenditures
 
(16.3
)
 
(16.5
)
 
(36.1
)
 
(44.0
)
 
 
(90.0
)
 
(90.0
)
Free Cash Flow
 
$
136.6

 
$
40.8

 
$
16.4

 
$
87.4

 
 
$
335.0

 
$
365.0

Totals may not sum due to rounding
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.



13