Crane Co. Reports Second Quarter Earnings of $.71 Per Share; Increases Quarterly Dividend by 20%; Raises Earnings Guidance for the Year.STAMFORD Stamford, town, England Stamford, town (1991 pop. 18,127), in the Parts of Kesteven, Lincolnshire, E central England, on the Welland River. It is a market town. Products include diesel engines, electrical equipment, bricks, and tiles. , Conn. -- Crane crane, in zoology crane, large wading bird found in marshes in the Northern Hemisphere and in Africa. Although sometimes confused with herons, cranes are more closely related to rails and limpkins. Co. (NYSE NYSE See: New York Stock Exchange : CR): E[acute accent acute accent n. A mark (´) indicating: a. that a vowel is close or tense, as é in French été. b. that a vowel or syllable has a high or rising pitch, as in Chinese or Ancient Greek. c. ]Second Quarter Highlights (vs. 2005): E[acute accent]--Earnings per share increased 20% to $.71 per share E[acute accent]--Sales increased 6% to $558 million E[acute accent]--Operating profit increased 20% to $66.1 million E[acute accent]--Operating profit margin was 11.8%, up from 10.4% E[acute accent]--Cash provided from operating activities increased $7 million to $50 million E[acute accent]First Half Highlights (vs. First Half 2005) E[acute accent]--Earnings per share increased 31% to $1.32 per share E[acute accent]--Sales increased 7% to $1.1 billion E[acute accent]--Operating profit increased 28% to $123.3 million E[acute accent]--Operating profit margin was 11.1%, up from 9.4% E[acute accent]--Cash provided from operating activities increased $30 million to $67 million E[acute accent]Crane Co. (NYSE: CR), a diversified diversified (di·verˑ·s manufacturer of engineered industrial products, reports second quarter 2006 net income was $44.5 million, or $.71 per share, compared with net income of $35.7 million, or $.59 per share, in the second quarter of 2005. E[acute accent]Second quarter 2006 sales increased $32.5 million, or 6%, including core business growth of $19.0 million (4%), sales from acquired businesses of $16.7 million (3%) and favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. foreign currency translation of $5.2 million (1%), reduced by lower sales from divested businesses of $8.4 million (2%). 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. of $66.1 million rose 20.4% compared with $54.9 million in the prior year quarter. Miscellaneous income was $2.6 million higher than 2005 largely resulting from the gain on the sale of Resistoflex Aerospace, partially offset by the loss on the Westad divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). , the sale of unused property resulting from prior plant consolidations, and legal costs associated with previous divestitures. The increase in miscellaneous income was largely offset by an increase in the tax rate in the second quarter of 2006 to 32.5% from 30.2% in the second quarter of 2005. E[acute accent]Order backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. at June June: see month. 30, 2006 totaled $637 million, compared with backlog of $622 million at March 31, 2006 and $597 million at December December: see month. 31, 2005. E[acute accent]"Our second quarter earnings of $.71 per share exceeded our guidance of $.62 to $.70 per share," said Crane Co. president and chief executive officer, Eric ERIC Educational Research Information Clearinghouse ERIC Educational Resources Information Center ERIC ERISA Industry Committee ERIC Epidemiologic Research and Information Center (Durham, NC) C. Fast. "Our improved second quarter 2006 performance was driven primarily by our Fluid Handling and Aerospace & Electronics segments. The growth in operating profits in Fluid Handling was particularly notable -- profits increased 50% over the second quarter of 2005 with operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: rising to 11.8%. During the second quarter, we closed on the purchase of Automatic Products international, which will strengthen our vending solutions business, and Telequip Corporation, a leader in coin dispensing dispensing provision of drugs or medicines as set out properly on a lawful prescription. A prescription can only be filled, the drugs supplied, by a registered pharmacist, veterinarian, dentist or member of the medical profession. solutions, which will broaden our payment solutions capabilities. Our increased earnings guidance and a 20% increase in our quarterly dividend reflect our confidence in the future prospects of the Company." E[acute accent]Cash Flow and Financial Position E[acute accent]Cash provided from operating activities was $50.3 million in the second quarter of 2006 compared with $42.8 million last year. Net debt to total capitalization Total capitalization The total long-term debt and all types of equity of a company that constitutes its capital structure. total capitalization See capitalization. increased to 18.4% at June 30, 2006, compared with 13.1% at December 31, 2005, reflecting the $149 million expended ex·pend tr.v. ex·pend·ed, ex·pend·ing, ex·pends 1. To lay out; spend: expending tax revenues on government operations. See Synonyms at spend. 2. year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. for the acquisitions of CashCode in January January: see month. 2006, and Automatic Products international and Telequip Corporation in June 2006. In the second quarter of 2006, the Company also repurchased 325,700 shares of its common stock on the open market at a cost of $13 million. (Please also see the attached 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 Financial Measures.) E[acute accent]Dividend Increase E[acute accent]On July July: see month. 24, 2006, the Company announced a 20% increase in the quarterly dividend from $.125 per share to $.15 per share, for an indicated annual dividend rate of $.60 per share. The new dividend rate will become effective with the third quarter 2006 quarterly dividend. E[acute accent]Segment Results E[acute accent]All comparisons below refer to the second quarter 2006 versus the second quarter 2005, unless otherwise specified spec·i·fy tr.v. spec·i·fied, spec·i·fy·ing, spec·i·fies 1. To state explicitly or in detail: specified the amount needed. 2. To include in a specification. 3. .
Aerospace & Electronics
Second Quarter Change
-------------------- -------------
(dollars in millions) 2006 2005
--------------------
Sales $144.4 $133.9 $10.5 8%
Operating Profit $26.2 $18.3 $7.9 43%
Profit Margin 18.1% 13.6%
E[acute accent]The second quarter 2006 sales increase of $10.5 million reflected sales increases of $8.6 million in the Aerospace Group and $1.9 million in the Electronics Group. The sales increase was effectively leveraged as segment operating profit increased by $7.9 million, with increases of $5.2 and $2.7 million in Aerospace and Electronics, respectively. E[acute accent]Aerospace Group sales Group sales Block sale (of large amounts) of securities to institutional investors. group sales The distribution of a new security issue to institutional clients. of $90.6 million increased $8.6 million, or 11%, from $82.0 million in the prior year period. Resistoflex Aerospace, which was sold in mid May 2006, had sales of $ 1.9 million and $3.6 million in the second quarters of 2006 and 2005, respectively. Excluding Resistoflex Aerospace, sales increased $10.3 million or 13% over the second quarter of 2005. Orders during the quarter (excluding Resistoflex) continued their strong pace, increasing 35% over the second quarter of 2005. Operating profit increased $5.2 million reflecting higher volumes, improved margins and favorable mix. E[acute accent]Electronics Group sales of $53.8 million increased $1.9 million, or 4%, from $51.9 million in the prior year period, with sales increases in Power Solutions and Microwave microwave, electromagnetic wave having a frequency range from 1,000 megahertz (MHz) to 300,000 MHz, corresponding to a wavelength range from 300 mm (about 12 in.) to 1 mm (about 0.04 in.). Like light waves, microwaves travel essentially in straight lines. Solutions more than offsetting lower Electronic Manufacturing Solutions sales. Operating profit improved by $2.7 million with margins improved over the first quarter of 2006 and the second quarter of 2005. E[acute accent]The Aerospace & Electronics segment backlog was $381 million at June 30, 2006, compared with $365 million at March 31, 2006 and $365 million at December 31, 2005.
Engineered Materials
Second Change
Quarter
------------ -----------
(dollars in millions) 2006 2005
------------
Sales $82.3 $79.2 $3.1 4%
Operating Profit $13.2 $18.3 ($5.1)(28%)
Profit Margin 16.0% 23.1%
E[acute accent]The second quarter 2006 sales increase of $3.1 million, or 4%, reflects higher volumes to recreational vehicle customers and building products. Profit margin in 2006 decreased to 16.0% primarily as a result of higher expenses largely for recreational vehicle manufacturers' product support activities, warranty An assurance, promise, or guaranty by one party that a particular statement of fact is true and may be relied upon by the other party. Warranties are used in a variety of commercial situations. In many instances a business may voluntarily make a warranty. costs and new and existing market development activities. Product support activities and warranty costs in the second half of 2006 are expected to be at a reduced rate.
Merchandising Systems
Second Change
Quarter
------------- ---------
(dollars in millions) 2006 2005
------ ------
Sales $53.6 $45.7 $7.9 17%
Operating Profit $4.5 $4.1 $0.4 10%
Profit Margin 8.3% 8.9%
E[acute accent]Merchandising merchandising Element of marketing concerned especially with the sale of goods and services to customers. One aspect of merchandising is advertising, which aims to capture the interest of the segment of the population most likely to buy the product. Systems sales increased $7.9 million, or 17%, reflecting increased Payment Solutions sales of $14.7 million primarily from the CashCode acquisition made in January 2006, more than offsetting a $6.8 million decline in Vending Solutions sales. European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. and North American vending North American Vending (NO LONGER IN BUSINESS) is a bulk vending business opportunity that claims to sell "The Ultimate Vending Machine." The company's website invites customers to compare their machine against 1.800. machine sales were significantly below last year as the 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. industry continues to experience declining demand from route operators whose cash flow has been diminished di·min·ish v. di·min·ished, di·min·ish·ing, di·min·ish·es v.tr. 1. a. To make smaller or less or to cause to appear so. b. by higher gas prices and food costs. The effect of the reduced Vending Solutions sales and severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when costs ($1 million) were more than offset by the increased profits from Payment Solutions. E[acute accent]In late June, Crane acquired certain assets of Automatic Products international, ltd. (APi) and all of the outstanding stock of Telequip Corporation. The APi vending equipment business is expected to have annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. sales of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $40 million in 2006 with manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. to be consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: into the Crane Merchandising Systems St. Louis Louis, titular duke of Burgundy Louis, 1682–1712, titular duke of Burgundy; grandson of King Louis XIV of France. He became heir to the throne on the death (1711) of his father, Louis the Great Dauphin. facility to realize cost savings. Telequip provides embedded Inserted into. See embedded system. and free-standing free-standing Managed care adjective Referring to a physically and, often, financially discrete entity–eg, a surgical center, that is separate from, but may be affiliated with, a hospital; FS facilities may provide ambulatory surgery, emergency or coin dispensing solutions principally focused on the retail market which includes grocery and convenience stores The following is a list of convenience stores organized by geographical location. Stores are grouped by the lowest heading that contains all locales in which the brands have significant presence. , quick-service restaurants and self-checkout/self-service kiosks. Telequip is projected to have annualized sales of approximately $23 million in 2006. Crane noted that while it expects that the three acquisitions made in 2006 will be accretive to 2007 earnings, the favorable impact in 2006 will be muted mut·ed adj. 1. a. Muffled; indistinct: a muted voice. b. Mute or subdued; softened: muted colors. 2. by costs of relocating APi's operations.
Fluid Handling
Second Quarter Change
--------------- ----------
(dollars in millions) 2006 2005
------- -------
Sales $253.8 $245.9 $7.9 3%
Operating Profit $30.0 $20.0 $10.0 50%
Profit Margin 11.8% 8.1%
E[acute accent]The second quarter sales increase of $7.9 million, or 3%, included $8.3 million (3%) of core sales and $1.3 million (1%) from the acquired Edlon business and $4.9 million (2%) from favorable foreign currency translation, offset partially by the sale of Westad. The decline in sales caused by the absence of Westad, which was sold effective April 1, 2006, was $6.6 million (3%) compared to the second quarter of 2005. Operating profit increased 50%, and margin continued to improve, versus both the second quarter of 2005 and the first quarter of 2006, reflecting strengthened management teams, improved operational processes and numerous productivity initiatives. E[acute accent]Valve valve, device for controlling the flow of fluids (liquids and gases). Valves vary in construction and size depending upon their function. Some are classified according to their method of operation or design, e.g. Group sales were $180.7 million in the second quarter of 2006 compared with $178.3 million in the second quarter of 2005. Valve Group core sales growth was $7.7 million (4%), and the Edlon acquisition contributed $1.3 million (1%), partially offset by $6.6 million (4%) of sales of Westad. Core sales improved from increased demand for industrial valves, particularly from the chemical process and refining refining, any of various processes for separating impurities from crude or semifinished materials. It includes the finer processes of metallurgy, the fractional distillation of petroleum into its commercial products, and the purifying of cane, beet, and maple sugar industries, and generally higher demand from many commercial applications. Operating profit increased 48% versus the prior year, reflecting higher sales and improved operating costs operating costs npl → gastos mpl operacionales with price increases covering rising material and other costs. Profit margin of 12.2% was up strongly from 8.3% in the prior year. E[acute accent]Crane Pumps & Systems sales of $26.5 million increased $1.9 million, or 8%, over the second quarter of 2005. Sales increased across most of the served markets. Profit margin of 10.1% was up from 5.6% in the prior year due to productivity gains from facilities consolidation, and customer price increases. E[acute accent]Crane Supply sales of $44.1 million increased $3.2 million, or 8%, benefited from $4.4 million (11%) of favorable foreign currency translation, partially offset by a decline in core sales of $1.2 million (3%). The sales decline was primarily a result of softness in the industrial manufacturing, repair and overhaul market in Ontario Ontario, city, United States Ontario, city (1990 pop. 133,179), San Bernardino co., S Calif., near Los Angeles, in a region of vineyards; inc. 1891. . Profit margin increased from 9.7% in 2005 to 11.9% in 2006 as a result of an improved sales mix sales mix See product mix. . E[acute accent]The Fluid Handling segment backlog was $204 million at June 30, 2006, compared with $206 million at March 31, 2006 and $189 million at December 31, 2005. Excluding Westad, the backlog was $184 million and $165 million at March 31, 2006 and December 31, 2005, respectively.
Controls
Second Change
Quarter
------------- ---------
(dollars in millions) 2006 2005
------ ------
Sales $24.0 $21.0 $3.0 14%
Operating Profit $3.0 $1.8 $1.2 63%
Profit Margin 12.3% 8.7%
E[acute accent]Sales improvements of $3.0 million, or 14%, were largely attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to increased demand for products in the transportation, oil and gas exploration, and gas transmission markets. Operating profit was higher than the prior year period as volume gains were leveraged to achieve higher operating margins. E[acute accent]Third Quarter and Full Year 2006 Guidance E[acute accent]Management expects earnings in the third quarter 2006 to be in the range of $.68 to $.74 per share, compared to $.66 per share in the third quarter 2005. Earnings in 2006 are being adversely impacted by approximately $.02 per share per quarter, or about $.09 per share for the year, as a result of the new accounting treatment requiring the expensing of stock options. On a full year basis, management is raising its 2006 earnings per share guidance of $2.50 to $2.65 per share to $2.60 to $2.70. If the Company had expensed options in 2005, earnings per share for such year would have decreased from $2.25 (as reported) to $2.16 (as adjusted). The Company's current 2006 EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. guidance represents a 20 - 25% increase above its adjusted EPS for 2005. E[acute accent]Management is maintaining its expected free cash flow (cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses less capital expenditures) in 2006 of approximately $185 million ($154 million in 2005). Please see the Non-GAAP Financial Measures table attached to this press release for details. Additional information with respect to the Company's asbestos asbestos, mineral asbestos, common name for any of a variety of silicate minerals within the amphibole and serpentine groups that are fibrous in structure and more or less resistant to acid and fire. liability and related accounting provisions and cash requirements is set forth in the Current Report on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. filed with a copy of this press release. E[acute accent]Conference Call E[acute accent]Crane Co. has scheduled a conference call to discuss the second quarter's financial results on Tuesday Tuesday: see week. , July 25th, 2006 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. E[acute accent]Crane Co. is a diversified manufacturer of 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 au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. merchandising, transportation and other markets. The Company has five business segments: Aerospace & Electronics, Engineered Materials, Merchandising Systems, Fluid Handling, and Controls. Crane has approximately 10,500 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 Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). ,
Asia and Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. . 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. E[acute accent]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 for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. 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, 2005 and subsequent reports filed with the Securities and Exchange Commission.
CRANE CO.
Income Statement Data
(in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
-------- -------- ---------- ----------
Net Sales:
Aerospace & Electronics $144,438 $133,940 $ 286,878 $ 267,521
Engineered Materials 82,345 79,194 168,295 159,992
Merchandising Systems 53,625 45,687 106,182 89,440
Fluid Handling 253,848 245,917 499,196 474,468
Controls 24,007 20,967 47,250 41,483
Intersegment Elimination (112) (86) (268) (224)
-------- -------- ---------- ----------
Total Net Sales $558,151 $525,619 $1,107,533 $1,032,680
======== ======== ========== ==========
Operating Profit:
Aerospace & Electronics $ 26,173 $ 18,268 $ 48,647 $ 34,218
Engineered Materials 13,151 18,286 28,890 35,144
Merchandising Systems 4,462 4,052 8,214 7,833
Fluid Handling 30,019 20,033 54,376 32,457
Controls 2,960 1,817 5,552 3,577
Corporate (10,675) (7,558) (22,372) (16,481)
-------- -------- ---------- ----------
Total Operating
Profit 66,090 54,898 123,307 96,748
Interest Income 903 161 1,611 502
Interest Expense (5,496) (5,742) (11,023) (11,462)
Miscellaneous- Net * 4,422 1,784 5,681 2,066
-------- -------- ---------- ----------
Income Before Income
Taxes 65,919 51,101 119,576 87,854
Provision for Income
Taxes 21,456 15,427 37,714 27,182
-------- -------- ---------- ----------
Net Income $ 44,463 $ 35,674 $ 81,862 $ 60,672
-------- -------- ---------- ----------
Share Data:
Net Income per Diluted
Share $ 0.71 $ 0.59 $ 1.32 $ 1.01
======== ======== ========== ==========
Average Diluted Shares
Outstanding 62,338 60,091 62,192 60,060
Average Basic Shares
Outstanding 60,995 59,606 60,876 59,527
Supplemental Data:
-------------------------
Cost of Sales $376,423 $363,333 $ 747,923 $ 714,975
Selling, General &
Administrative 115,638 107,388 236,303 220,957
Depreciation and
Amortization ** 11,532 12,499 26,797 24,843
Stock Compensation
Expense 4,037 1,920 8,119 4,873
* Second quarter 2006 miscellaneous- net includes a net gain of $4.1
million consisting of $8.3 million from the sales of Resistoflex
Aerospace and Westad offset by $4.2 million from the sale of unused
property resulting from prior plant consolidations and certain legal
costs associated with previous divestitures.
** Amount included within cost of sales and
selling, general & administrative costs.
CRANE CO.
Condensed Balance Sheets
(in thousands)
June 30, December 31,
2006 2005
---------- ----------
ASSETS
Current Assets
Cash and Cash Equivalents $ 100,164 $ 180,392
Accounts Receivable 336,291 289,521
Inventories 284,206 272,354
Other Current Assets 50,082 56,128
---------- ----------
Total Current Assets 770,743 798,395
Property, Plant and Equipment 260,928 263,791
Insurance Receivable - Asbestos 216,449 224,600
Other Assets 329,435 284,345
Goodwill 664,578 568,355
---------- ----------
Total Assets $2,242,133 $2,139,486
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Notes Payable and Current Maturities of Long-
Term Debt $ 188 $ 254
Accounts Payable 153,964 149,647
Current Asbestos Liability 55,000 55,000
Accrued Liabilities 174,037 174,366
Income Taxes 19,163 19,322
---------- ----------
Total Current Liabilities 402,352 398,589
Long-Term Debt 294,033 293,248
Deferred Tax Liability 75,168 71,406
Long-Term Asbestos Liability 509,599 526,830
Other Liabilities 98,517 96,119
Shareholders' Equity 862,464 753,294
---------- ----------
Total Liabilities and Shareholders' Equity $2,242,133 $2,139,486
========== ==========
CRANE CO.
Condensed Statements of Cash Flows
(in thousands)
Six Months
Three Months Ended Ended
June 30, June 30,
2006 2005 2006 2005
--------- -------- --------- --------
Operating Activities:
Net income $44,463 $35,674 $81,862 $60,672
Income from joint venture (1,458) (1,384) (3,219) (2,582)
Gain on divestitures (8,267) - (8,267) -
Depreciation and amortization 11,532 12,499 26,797 24,843
Stock-based compensation
expense 4,037 1,920 8,119 4,873
Cash (used for) provided by
operating working capital (1,249) 385 (34,148) (44,636)
Other 1,002 2,155 5,198 3,133
--------- -------- --------- --------
Subtotal 50,060 51,249 76,342 46,303
Asbestos related payments, net
of insurance recoveries 220 (8,434) (9,080) (19,258)
Refund associated with
terminated
Master Settlement
Agreement - - - 9,925
--------- -------- --------- --------
Total provided by operating
activities 50,280 42,815 67,262 36,970
--------- -------- --------- --------
Investing Activities:
Capital expenditures (8,611) (5,800) (17,001) (11,375)
Proceeds from disposition of
capital assets 1,618 1,126 2,854 1,381
Proceeds from divestitures 25,880 - 25,880 -
Payment for acquisition, net
of cash acquired (63,727) - (149,065) -
--------- -------- --------- --------
Total used for investing
activities (44,840) (4,674) (137,332) (9,994)
--------- -------- --------- --------
Financing Activities:
Dividends paid (7,669) (5,965) (15,292) (11,920)
Common shares acquired on the
open market (12,958) - (24,999) -
Stock options exercised - net
of shares reacquired 10,247 115 18,643 1,876
Excess tax benefit from stock-
based compensation 5,059 - 6,775 -
Repayment of debt, net (74) (2,741) (276) (4,425)
--------- -------- --------- --------
Total used for financing
activities (5,395) (8,591) (15,149) (14,469)
--------- -------- --------- --------
Effect of exchange rate on cash
and cash equivalents 3,618 (2,503) 4,991 (3,610)
--------- -------- --------- --------
Increase (decrease) in cash and
cash equivalents 3,663 27,047 (80,228) 8,897
Cash and cash equivalents at
beginning of period 96,501 32,577 180,392 50,727
--------- -------- --------- --------
Cash and cash equivalents at
end of period $100,164 $59,624 $100,164 $59,624
========= ======== ========= ========
CRANE CO.
Order Backlog
(in thousands)
June 30, March 31, December 31,June 30,
2006 2006 2005 2005
--------- --------- --------- ---------
Aerospace & Electronics $380,514 $364,539 $365,010 $370,913
Engineered Materials 18,617 16,972 17,241 15,964
Merchandising Systems 15,190 14,838 9,183 9,298
Fluid Handling 204,180 205,741 188,832 201,768
Controls 18,385 19,480 16,864 14,952
--------- --------- --------- ---------
Total Backlog $636,886 $621,570 $597,130 $612,895
========= ========= ========= =========
CRANE CO.
Non-GAAP Financial Measures
(in thousands)
June 30, December 31,
2006 2005
----------- ---------
BALANCE SHEET ITEMS
-------------------
Notes Payable and Current Maturities of
Long-Term Debt $188 $254
Long-Term Debt 294,033 293,248
----------- ---------
Total Debt 294,221 293,502
Less Cash and Cash Equivalents (100,164) (180,392)
----------- ---------
Net Debt 194,057 113,110
Shareholders' Equity 862,464 753,294
----------- ---------
Total Capitalization $1,056,521 $866,404
=========== =========
Percentage of Net Debt to Total
Capitalization 18.4% 13.1%
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
------------------------------------
CASH FLOW ITEMS
---------------
Cash Provided from Operating Activities
before Asbestos - Related
Payments $ 50,060 $51,249 $76,342 $46,303
Asbestos Related Payments, Net of
Insurance Recoveries 220 (8,434) (9,080) (19,258)
Refund Associated with Terminated
Master Settlement Agreement - - - 9,925
---------------------------------
Cash Provided from Operating
Activities 50,280 42,815 67,262 36,970
Less: Capital Expenditures (8,611) (5,800) (17,001) (11,375)
---------------------------------
Free Cash Flow $ 41,669 $37,015 $50,261 $25,595
=================================
Year Ended
December 31,
2006 2005
--------- -----------
(Estimated)
Cash Provided from Operating Activities
before Asbestos - Related Payments $260,000 $216,958
Asbestos Related Payments, Net of Insurance
Recoveries (45,000) (45,338)
Refund Associated with Terminated
Master Settlement Agreement - 9,925
--------- -----------
Cash Provided from Operating Activities 215,000 181,545
Less: Capital Expenditures (30,000) (27,164)
--------- -----------
Free Cash Flow $185,000 $154,381
========= ===========
* Includes certain legal fees and expenses relating to the
terminated Master Settlement Agreement amounting to $5.1 million for
the full year of 2005, $4.1 million in the first six months of 2005
and $.5 million in the second quarter of 2005.
Certain non-GAAP measures have been provided to facilitate
comparison with the prior year.
Free cash flow provides supplemental information to assist
management and investors in analyzing the Company's ability to
generate positive cash flow. 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 reported in accordance with generally
accepted accounting principles and may be inconsistent with similar
measures presented by other companies.
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