Crane Co. Reports Second Quarter '09 Results.STAMFORD, Conn. -- Crane Co. (NYSE NYSE See: New York Stock Exchange : CR), a diversified diversified (di·verˑ·s manufacturer of highly engineered industrial products, reported second quarter 2009 net income attributable to common shareholders of $27.8 million, or $0.47 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared with second quarter 2008 net income attributable to common shareholders of $59.0 million, or $0.97 per diluted share. Second quarter 2009 earnings were adversely impacted by net after-tax charges, of $1.4 million, or $0.02 per share, primarily related to a previously announced restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). program. Second quarter 2008 earnings benefited from recoveries of $2.9 million after-tax, or $0.05 per share, in conjunction with environmental remediation Generally, remediation means providing a remedy, so environmental remediation deals with the removal of pollution or contaminants from environmental media such as soil, groundwater, sediment, or surface water for the general protection of human health and the environment or from a activities. (Please see non-GAAP Financial Measures table for details.) Second quarter 2009 sales decreased $148.0 million, or 21%, including a core sales decline of $146.1 million (21%) and unfavorable foreign currency translation of $37.3 million (5%), partially offset by an increase in sales from acquired businesses of $35.4 million (5%). Order backlog was $782 million at December 31, 2008, $724 million at March 31, 2009, and $697 million at June 30, 2009, representing quarterly declines of 7% and 4%, respectively. Cash Flow and Financial Position Cash provided by operating activities was $30.4 million in the second quarter of 2009, compared to $45.4 million in the second quarter of 2008, primarily reflecting lower earnings in 2009. Free cash flow (cash provided by operating activities less capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. ) for the second quarter of 2009 was $22.9 million, compared to $34.0 million in the prior year, reflecting lower cash provided from operations, partially offset by lower capital spending. The Company's cash position was $233.0 million at June 30, 2009, up $22.7 million from March 31, 2009 and essentially flat to December 31, 2008. (Please see the Condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. Statement of Cash Flows and Non-GAAP table) "Our sales and earnings declined from our record second quarter 2008 results and were lower than we expected just three months ago," said Crane Co. president and chief executive officer, Eric C. Fast. "The second quarter core sales decline of 21% exceeded the 16% decline in the first quarter and our full-year guidance of a 7% reduction. Year-over-year sales were sharply lower in our short-cycle businesses, specifically at Engineered Materials, Merchandising Systems and Controls, which continue to be impacted by very difficult end market conditions. Sales declines in our longer-cycle Aerospace and Fluid Handling businesses were more pronounced than the first quarter and we expect demand to soften through the balance of the year. As a result, we now expect our 2009 sales will be $2.2 billion, 8% below our February guidance of $2.4 billion and 15% below $2.6 billion in 2008. "Cost reduction activities are now expected to generate $125 million of cost savings in 2009, compared to our previous estimate of $75 million. Excluding the two acquisitions in 2008, headcount has been reduced by 1,900 people, or 16% since year end 2007, of which 270 occurred in the second quarter of this year and additional headcount reductions are expected in the second half. "Reflecting difficult market conditions, we are reducing our earnings per share and free cash flow guidance by 12% and 8%, respectively. "We continue to maintain a strong capital structure and liquidity position with $233 million in cash, a $300 million revolving bank credit agreement, and no near-term debt maturities. "Our strategy remains unchanged and our businesses are executing well in difficult markets. We are maintaining our customer-facing resources, taking market share and our disciplined cost controls are mitigating the effects of the downturn. We are positioned well to capitalize when markets recover." Segment Results All comparisons detailed in this section refer to the second quarter 2009 versus the second quarter 2008. Aerospace & Electronics [TABLE OMITTED] * Includes $0.6 million of restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. . The second quarter 2009 sales decrease of $18.9 million reflected a $20.5 million decline in Aerospace Group demand, partially offset by an increase of $1.5 million of Electronics Group revenue. Segment operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. increased by $0.6 million as sharply higher profits in the Electronics Group were offset by the impact of lower sales and profitability in the Aerospace Group. Second quarter 2008 operating profit benefited from a $5.6 million engineering claim recovery in the Aerospace Group. Aerospace & Electronics order backlog was $418 million at December 31, 2008, $396 million at March 31, 2009, and $383 million at June 30, 2009, representing quarterly declines of 3% and 5%, respectively. Engineered Materials [TABLE OMITTED] Segment sales declined 43%, reflecting significantly lower demand from recreational vehicle, transportation and, to a lesser extent, building products end markets. Operating profit declined due to significantly lower sales but was up sequentially from the first quarter. Operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: at 11.0% reflected the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impact of plant closures and a 46% reduction in headcount compared to year end 2007 levels. Merchandising Systems [TABLE OMITTED] * Includes $1.1 million of restructuring charges. Total Merchandising Systems sales decreased $42.9 million, or 37%, reflecting a sharp decline in both Vending Solutions and Payment Solutions sales. Operating profit and margins declined significantly reflecting deleverage on the reduced sales. The Company has made good progress and remains on track to complete the previously announced consolidation of its vending machine vending machine, coin-operated, automatic device for selling goods. Many vending machines are capable of making change, and some of the more sophisticated ones accept paper money or credit cards. production from St. Louis, Missouri into its Williston, South Carolina Williston is a town in Barnwell County, South Carolina, United States also known as WEEDSTON. The population was 3,307 at the 2000 census. The town lies in the center of the Charleston-Hamburg railroad line, the line of the Best Friend locomotive. facility by year end. In response to lower demand, Merchandising Systems headcount has been reduced approximately 20% compared to year end 2007 levels. Fluid Handling [TABLE OMITTED] * Includes $0.4 million of restructuring charges. Second quarter 2009 sales decreased $38 million, or 13%, including a decline of $43.4 million (15%) of core sales and unfavorable foreign currency translation of $30.0 million (10%), partially offset by sales from acquired businesses (Delta and Krombach) of $35.4 million (12%). Sales continued to be weak in the short-cycle MRO MRO In currencies, this is the abbreviation for the Mauritanian Ouguiya. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. businesses, as well as the longer-cycle energy, chemical and pharmaceutical businesses, which were impacted by continued project delays and cancellations as a result of poor market conditions. Profit margins decreased to 10.3% from last year's record levels of 15.5%, primarily reflecting the impact of lower volumes and unfavorable foreign exchange. The second quarter core sales decline of 15% was substantially greater than the first quarter's 5% decline and new orders were lower than sales in the second quarter, which is reflected in our lower backlog. As a result, additional cost reduction actions are being implemented to align the cost structure with demand. Fluid Handling order backlog was $303 million at December 31, 2008, $276 million at March 31, 2009, and $256 million at June 30, 2009, representing quarterly declines of 9% and 7%, respectively. Controls [TABLE OMITTED] Second quarter 2009 sales declined 46% reflecting significant deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in the oil & gas and transportation end markets. Operating profit decreased $5.3 million primarily reflecting the impact of lower sales in all of the Controls businesses. Full Year 2009 Guidance Based on lower than previously expected demand in the Merchandising Systems and Fluid Handling businesses, the Company lowered its 2009 sales estimate from $2.4 billion to $2.2 billion, and reduced its earnings per share guidance from $2.01 to $2.31 (which includes an $0.08 per share charge for a previously announced legal settlement) to $1.75 to $2.05. The new guidance estimate includes charges for potential restructuring and integration activities of $0.10 per share. In addition, free cash flow guidance was reduced to $135 million compared to the $146 million achieved in 2008, reflecting the lower earnings guidance. (Please see Non-GAAP table.) Conference Call Crane Co. has scheduled a conference call to discuss the second quarter's financial results on Tuesday, July 28, 2009 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 highly engineered industrial products. Founded in 1855, Crane provides products and solutions to customers in the aerospace, electronics, hydrocarbon hydrocarbon (hī'drōkär`bən), any organic compound composed solely of the elements hydrogen and carbon. The hydrocarbons differ both in the total number of carbon and hydrogen atoms in their molecules and in the proportion of hydrogen processing, petrochemical petrochemical, any one of a large group of chemicals derived from a component of petroleum or natural gas. The cracking processes for manufacturing gasoline produce vast quantities of gaseous hydrocarbons. , chemical, power generation, automated merchandising, transportation and other markets. The Company has five business segments: Aerospace & Electronics, Engineered Materials, Merchandising Systems, Fluid Handling, and Controls. Crane has approximately 11,000 employees in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. , Europe, Asia and Australia. Crane Co. is traded on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. (NYSE:CR). For more information, visit www.craneco.com. This press release may contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. as defined by the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended December 31, 2008 and subsequent reports filed with the Securities and Exchange Commission. (Financial Tables Follow) 2009 - 13 [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] * Includes Order Backlog of $41.8 million in June 2009, $46.5 million in March 2009 and $57.0 million in December 2008 pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. to the 2008 acquisitions of Delta and Krombach. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] * Includes a $14.5 million insurance settlement receipt from the Highlands Insurance Company. Certain non-GAAP measures have been provided to facilitate comparison with the prior year. The Company reports its financial results in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with U.S. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See 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 positive cash flow. 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. |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion