Crane Co. Reports Third Quarter Results

Third Quarter 2014 Highlights:

  • Excluding Special Items, earnings per diluted share (EPS) of $1.12 increased 8% compared to 2013
  • GAAP EPS of $0.47 decreased 52% compared to 2013 as a result of $0.65 in after-tax Special Items
  • Sales of $727 million increased 14.1% compared to 2013, with a core sales increase of 0.3%
  • Reducing EPS guidance to $4.40-$4.50, excluding Special Items (revised GAAP EPS guidance of $3.43-$3.53)
Monday, October 27, 2014 5:11 pm EDT

STAMFORD, Conn.--(BUSINESS WIRE)--Crane Co. (NYSE:CR), a diversified manufacturer of highly engineered industrial products, reported third quarter 2014 earnings of $0.47 per diluted share, compared to $0.97 per share in the third quarter of 2013. Third quarter 2014 results included Special Items of $38.7 million in after-tax charges, or $0.65 per share. Third quarter 2013 results included Special Items of $4.1 million in after-tax charges, or $0.07 per share. Excluding these Special Items in both years, third quarter 2014 earnings per diluted share increased 8% to $1.12, compared to $1.04 in the third quarter of 2013. (Please see the attached Non-GAAP Financial Measures table for additional details.)

Special Items in the third quarter of 2014 consisted of the following after-tax charges: $36.3 million, or $0.61 per share, reflecting an update to projected remediation costs for certain legacy environmental liabilities; $2.3 million, or $0.04 per share, related to previously disclosed repositioning activities; and $0.8 million, or $0.01 per share, related to the December 2013 acquisition of MEI. Special Items in the third quarter of 2014 also included a $0.7 million gain on a real estate divestiture, or $0.01 per share. Special Items in the third quarter of 2013 included transaction-related costs of $4.1 million, or $0.07 per share, related to the acquisition of MEI.

The Special Item related to environmental updates was comprised of two components. The Company extended its liability at its legacy Superfund Site in Goodyear, Arizona for certain site remediation and accrued costs through 2022, resulting in an increase of $31.9 million, after tax. In addition, the Company recorded a $4.4 million after tax charge related to its legacy site in Roseland, New Jersey, covering expected remediation costs through 2017.

Third quarter 2014 sales of $727.4 million increased $89.9 million, or 14.1%, compared to $637.5 million in the third quarter of 2013, resulting from a core sales increase of $1.6 million, or 0.3%; sales from acquisitions, net of divestitures, of $86.2 million, or 13.5%; and favorable foreign exchange of $2.1 million, or 0.3%.

Operating profit in the third quarter decreased 46.4% to $47.7 million, compared to $89.0 million in the third quarter of 2013. The decline in operating profit was a result of Special Items. Excluding Special Items, third quarter operating profit increased 17.6% to $108.0 million, compared to $91.9 million in the third quarter of 2013. (Please see the attached Non-GAAP Financial Measures table.)

“While overall margins were strong, third quarter results fell short of our expectations primarily as a result of lower core sales in our Fluid Handling business,” said Max Mitchell, Crane Co. President and Chief Executive Officer. “We were disappointed by lower sales of process valves following solid order momentum in the second quarter. At Aerospace & Electronics, margins were expected to be lower this year as a result of incremental investment spending related to new program wins. However, margins were also impacted in the quarter by lower defense related sales, as well as a product launch that incurred temporarily higher costs which are now largely behind us. These headwinds were partially offset by a strong quarter at Payment & Merchandising Technologies where higher sales, synergy realization, and productivity initiatives contributed to results. As a result of these factors, along with increasing global economic uncertainty, we are reducing our guidance range, excluding Special Items, to a range of $4.40-$4.50, from the prior range of $4.55-$4.75.” (Please see the attached Non-GAAP Financial Measures table.)

The Company also revised its 2014 earnings guidance on a GAAP basis to a range of $3.43-$3.53 per diluted share, from a range of $4.18-$4.38 per diluted share. The revision reflects the change to non-GAAP earnings guidance, as well as $0.61 per diluted share related to the environmental provision recorded during the third quarter.

Cash Flow and Other Financial Metrics

Cash provided by operating activities for the third quarter of 2014 was $68.2 million, compared to $80.5 million in the third quarter of 2013. Cash provided by operating activities for the nine months ended September 30, 2014 was $113.4 million, compared to $91.0 million in the nine months ended September 30, 2013. Capital expenditures in the third quarter of 2014 were $11.5 million, compared to $7.0 million in the third quarter of 2013. The Company’s cash position was $301.7 million at September 30, 2014, compared to $270.6 million at December 31, 2013. Total debt was $864.0 million at September 30, 2014, compared to $875.0 million at December 31, 2013.

Segment Results

All comparisons detailed in this section refer to operating results for the third quarter 2014 versus the third quarter 2013, excluding Special Items.

 

Fluid Handling

 
      Third Quarter     Change
(dollars in millions) 2014     2013
 
Sales $314.5 $322.2 ($7.7) -2.4%
 
Operating Profit $48.1 $46.6 $1.5 3.3%
Operating Profit, before Special Items* $49.3 $46.6 $2.7 5.8%
 
Profit Margin 15.3% 14.5%
Profit Margin, before Special Items* 15.7% 14.5%
 

*Excludes $1.2 million of repositioning charges in the third quarter of 2014

Third quarter 2014 sales decreased $7.7 million, or -2.4%, which included a core sales decline of $6.3 million, or -2.0%, and a $2.5 million, or -0.8%, impact from the second quarter divestiture of Crane Water. These headwinds were partially offset by favorable foreign exchange of $1.1 million, or 0.3%. The core sales decline was driven primarily by lower sales of process valves. Operating margin rose to 15.7%, up 120 basis points from last year, as continued productivity gains and lower pension expense offset lower volumes and unfavorable mix. Fluid Handling order backlog was $349.6 million at September 30, 2014; after adjusting for the impact of the divestiture, comparable backlog was $328.4 million at December 31, 2013 and $351.1 million at September 30, 2013.

 

Payment & Merchandising Technologies

 
      Third Quarter       Change
(dollars in millions) 2014       2013    
 
Sales $181.1 $83.6 $97.4 116.5%
 
Operating Profit $25.1 $7.9 $17.3 219.4%
Operating Profit, before Special Items* $27.1 $7.9 $19.2 244.0%
 
Profit Margin 13.9% 9.4%
Profit Margin, before Special Items* 15.0% 9.4%
 

* Excludes $1.9 million of transaction- and integration-related expenses in the third quarter of 2014

Segment sales of $181.1 million increased $97.4 million, or 116.5%, driven primarily by $88.6 million of sales related to the MEI transaction, core sales growth of $7.9 million, or 9.4%, and favorable foreign exchange of $0.9 million, or 1.1%. Operating profit increased to $27.1 million in the quarter, primarily reflecting the impact of the MEI acquisition.

 

Aerospace & Electronics

 
          Third Quarter       Change
(dollars in millions) 2014       2013
 
Sales $167.2 $169.8 ($2.6) -1.5%
 
Operating Profit $29.9 $38.1 ($8.2) -21.6%
Operating Profit, before Special Items* $32.1 $38.1 ($6.0) -15.7%
 
Profit Margin 17.9% 22.4%
Profit Margin, before Special Items* 19.2% 22.4%

 

* Excludes $2.2 million of repositioning charges in the third quarter of 2014

Third quarter 2014 sales decreased $2.6 million, or -1.5%, reflecting a sales increase of $3.5 million, or 3.3%, in the Aerospace Group, and a sales decline of $6.2 million, or -9.8%, in the Electronics Group. Operating profit decreased $6.0 million, reflecting higher levels of engineering spending and other program investments supporting new product development activities, the impact of the lower sales in Electronics, and higher costs related to a product launch. Aerospace & Electronics order backlog was $404.8 million at September 30, 2014, compared to $361.3 million at December 31, 2013, and $381.8 million at September 30, 2013.

 

Engineered Materials

 
              Third Quarter       Change
(dollars in millions) 2014       2013      
 
Sales $64.7 $62.0 $2.8 4.5%
 
Operating Profit $9.0 $10.8 ($1.8) -16.3%

 

Profit Margin                                

14.0% 17.4%

 

Sales of $64.7 million were 4.5% higher than the third quarter of 2013, driven primarily by higher sales to recreational vehicle equipment manufacturers. Operating profit decreased 16.3% to $9.0 million, reflecting negative product mix and higher material costs.

Revising 2014 Earnings Guidance

The Company reduced its 2014 earnings per share guidance, excluding Special Items, to a range of $4.40-$4.50, from the prior range of $4.55-$4.75. Management now expects 2014 sales of approximately $2.95 billion, versus prior guidance of approximately $3.0 billion. The revised guidance reflects core sales growth of 0% to 1%, compared to the prior range of 1% to 3%. Full year 2014 free cash flow (cash provided by operating activities less capital spending) is expected to be in a range of $200 to $230 million versus a prior range of $225 to $250 million. (Please see the attached Non-GAAP Financial Measures table.)

Additional Information

Please see the Non-GAAP Financial Measures table attached to this press release for supporting details. 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.

Conference Call

Crane Co. has scheduled a conference call to discuss the third quarter financial results on Tuesday, October 28, 2014 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. 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 provides products and solutions to customers in the hydrocarbon processing, petrochemical, chemical, power generation, unattended payment, automated merchandising, aerospace, electronics, transportation and other markets. The Company has four business segments: Fluid Handling, Payment & Merchandising Technologies, Aerospace & Electronics and Engineered Materials. Crane 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 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, 2013 and subsequent reports filed with the Securities and Exchange Commission.

 
CRANE CO.    
Income Statement Data
(in thousands, except per share data)
 
  Three Months Ended     Nine Months Ended
September 30, September 30,
2014     2013 2014     2013
Net Sales:
Fluid Handling $ 314,461 $ 322,152 $ 949,812 $ 968,926
Payment & Merchandising Technologies 181,057 83,636 534,753 257,927
Aerospace & Electronics 167,158 169,771 513,672 507,046
Engineered Materials 64,737   61,956   196,102   179,933  
Total Net Sales 727,413   637,515   2,194,339   1,913,832  
 
Operating Profit (Loss):
Fluid Handling 48,131 46,594 144,832 146,688
Payment & Merchandising Technologies 25,134 7,869 51,225 26,902
Aerospace & Electronics 29,870 38,105 98,312 115,257
Engineered Materials 9,038 10,792 29,602 28,538
Corporate * (8,640 ) (14,351 ) (41,472 ) (52,630 )
Environmental Provision (55,800 ) -   (55,800 ) -  
Total Operating Profit 47,733 89,009 226,699 264,755
 
Interest Income 383 337 1,136 1,488
Interest Expense (9,556 ) (6,688 ) (29,129 ) (20,651 )
Miscellaneous- Net 342   (456 ) (1,376 ) (170 )
Income Before Income Taxes 38,902 82,202 197,330 245,422
Provision for Income Taxes 10,686   24,719   60,333   74,583  
Net income before allocation to noncontrolling interests 28,216 57,483 136,997 170,839
 
Less: Noncontrolling interest in subsidiaries' earnings 137 352 537 1,043
       
Net income attributable to common shareholders $ 28,079   $ 57,131   $ 136,460   $ 169,796  
 
Share Data:
Earnings per Diluted Share $ 0.47 $ 0.97 $ 2.28 $ 2.89
 
Average Diluted Shares Outstanding 59,903 59,035 59,734 58,737
Average Basic Shares Outstanding 58,971 58,093 58,770 57,814
 

Supplemental Data:

Cost of Sales $ 475,784 $ 421,317 $ 1,421,275 $ 1,257,161
Selling, General & Administrative 143,606 127,189 460,716 391,916
Environmental Provision 55,800 - 55,800 -
Repositioning Charges (see non-GAAP measures) 3,396 - 11,592 -
Acquisition Related Charges (see non-GAAP measures) 1,094 - 18,257 -
Depreciation and Amortization ** 18,021 12,435 57,954 38,159
Stock-Based Compensation Expense 5,355 5,913 15,944 16,299
 
* Corporate includes $6.5 million for a settlement of a lawsuit recorded in June 2014. Corporate also included acquisition related credit of $0.8 million and cost of $2.9 million for the three months ended September 30, 2014 and 2013, respectively and $1.2 million and $12.6 million of cost for the nine months ended September 30, 2014 and 2013, respectively.
 
** Amount included within cost of sales and selling, general & administrative costs.
 
 
CRANE CO.
Condensed Balance Sheets
(in thousands)
 
        September 30,     December 31,
2014 2013
 
ASSETS
Current Assets
Cash and Cash Equivalents $ 301,672 $ 270,643
Accounts Receivable, net 442,535 437,541
Current Insurance Receivable - Asbestos 22,783 22,783
Inventories, net 409,044 368,886
Other Current Assets 50,050 49,239
Total Current Assets 1,226,084 1,149,092
 
Property, Plant and Equipment, net 294,762 305,055
Long-Term Insurance Receivable - Asbestos 132,427 148,222
Other Assets 677,179 707,922
Goodwill 1,223,653 1,249,316
 
Total Assets $ 3,554,105 $ 3,559,607
 
LIABILITIES AND EQUITY

Current Liabilities

Notes Payable and Current Maturities of Long-Term Debt $ 114,814 $ 125,826
Accounts Payable 224,791 229,828
Current Asbestos Liability 88,038 88,038
Accrued Liabilities 220,744 223,148
Income Taxes 9,523 2,062
Total Current Liabilities 657,910 668,902
 
Long-Term Debt 749,202 749,170
Long-Term Deferred Tax Liability 71,894 76,041
Long-Term Asbestos Liability 548,542 610,530
Other Liabilities 254,727 240,291
 
Total Equity 1,271,830 1,214,673
 
Total Liabilities and Equity $ 3,554,105 $ 3,559,607
 
 
CRANE CO.    
Condensed Statements of Cash Flows
(in thousands)
 
        Three Months Ended       Nine Months Ended
September 30, September 30,
2014 2013 2014     2013
Operating Activities:
Net income attributable to common shareholders $ 28,079 $ 57,131 $ 136,460 $ 169,796
Noncontrolling interest in subsidiaries' earnings   137     352     537     1,043  
Net income before allocations to noncontrolling interests 28,216 57,483 136,997 170,839
Environmental provision 55,800 - 55,800 -
Restructuring - Non Cash - - 954 -
Depreciation and amortization 18,021 12,435 57,954 38,159
Stock-based compensation expense 5,355 5,913 15,944 16,299
Defined benefit plans and postretirement expense (2,925 ) 1,180 (8,775 ) 3,539
Deferred income taxes (6,956 ) 8,477 3,686 18,124
Cash provided by (used for) operating working capital 7,116 25,277 (47,310 ) (88,808 )
Defined benefit plans and postretirement contributions (9,726 ) (2,664 ) (22,744 ) (13,185 )
Environmental payments, net of reimbursements (3,927 ) (5,727 ) (8,597 ) (11,202 )
Other   (7,373 )   (2,546 )   (24,282 )   5,548  
Subtotal 83,601 99,828 159,627 139,313
Asbestos related payments, net of insurance recoveries   (15,441 )   (19,374 )   (46,193 )   (48,314 )
Total provided by operating activities   68,160     80,454     113,434     90,999  
 
Investing Activities:
Capital expenditures (11,462 ) (6,977 ) (32,152 ) (19,016 )
Proceeds from disposition of capital assets 3,911 85 4,976 372
Proceeds from divestiture - - 2,081 -
Proceeds from acquisition   -     -     6,100     -  
Total used for investing activities   (7,551 )   (6,892 )   (18,995 )   (18,644 )
 
Financing Activities:
Dividends paid (19,466 ) (17,440 ) (54,759 ) (49,778 )
Stock options exercised - net of shares reacquired 900 4,041 8,747 24,083
Excess tax benefit from stock-based compensation 404 865 7,869 5,787
Change in short-term debt (39,000 ) 110,292 (11,000 ) 123,197
Repayment of long-term debt   -     (200,000 )   -     (200,000 )
Total used for financing activities   (57,162 )   (102,242 )   (49,143 )   (96,711 )
 
Effect of exchange rate on cash and cash equivalents   (15,967 )   11,166     (14,267 )   3,813  
Increase (decrease) in cash and cash equivalents (12,520 ) (17,514 ) 31,029 (20,543 )
Cash and cash equivalents at beginning of period   314,192     420,918     270,643     423,947  
Cash and cash equivalents at end of period $ 301,672   $ 403,404   $ 301,672   $ 403,404  
 
 
CRANE CO.
Order Backlog
(in thousands)
 
          September 30,       June 30,       March 31,       December 31,       September 30,
2014 2014 2014 2013 2013
 
Fluid Handling * $ 349,618 $ 369,483 $ 350,720 $ 333,860 $ 355,192
Payment & Merchandising Technologies ** 58,832 69,857 58,787 51,888 23,901
Aerospace & Electronics 404,833 396,835 397,541 361,323 381,830
Engineered Materials   14,406   17,017   16,624   14,661   12,572
Total Backlog $ 827,689 $ 853,192 $ 823,672 $ 761,732 $ 773,495
 
* Includes Order Backlog of $5.4 million at March 31, 2014, $5.5 million at December 31, 2013 and $4.1 million at September 30, 2013 pertaining to a business divested in June 2014.
 
** Includes $36.3 million, $39.3 million, $37.0 million and $31.9 million of Order Backlog as of September 30, 2014, June 30, 2014, March 31, 2014 and December 31, 2013, respectively, pertaining to the MEI business acquired in December 2013.
 
 
CRANE CO.
Non-GAAP Financial Measures
(in thousands)

INCOME ITEMS

      Three Months Ended   Nine Months Ended Percent Change   Percent Change
September 30, September 30, September 30, 2014 September 30, 2014
2014   2013 2014   2013   Three Months Nine Months
 
 
Net Sales $ 727,413 $ 637,515 $ 2,194,339 $ 1,913,832 14.1 % 14.7 %
 
 
Operating Profit 47,733 89,009 226,699 264,755 -46.4 % -14.4 %
Percentage of Sales 6.6 % 14.0 % 10.3 % 13.8 %
 

Special Items impacting Operating Profit:

 
Acquisition transaction costs (a) - 2,854 - 12,595
 
Acquisition related inventory and backlog amortization (b) - - 4,790 -
 
Acquistion related integration costs (c) 984 - 7,739 -
 
Acquistion related restructuring costs (d) 111 - 5,728 -
 
Repositioning charges (e) 3,396 - 11,592 -
 
Lawsuit settlement charge (f) - - 6,500 -
 
Environmental Provision (g) 55,800

-

55,800

-

 

   
Operating Profit before Special Items $ 108,024   $ 91,863   $ 318,848   $ 277,350   17.6 % 15.0 %
 
Percentage of Sales 14.9 % 14.4 % 14.5 % 14.5 %
 
 
Net Income Attributable to Common Shareholders $ 28,079 $ 57,131 $ 136,460 $ 169,796
Per Share $ 0.47 $ 0.97 $ 2.28 $ 2.89 -51.6 % -21.0 %
 

Special Items impacting Net Income Attributable to Common

Shareholders:

 
Acquisition transaction costs - Net of Tax (a) - 2,854 - 12,595
Per Share $ 0.05 $ 0.21
 
Acquisition related inventory and backlog amortization - Net of Tax (b) - - 3,018 -
Per Share $ 0.05
 
Acquisition related integration costs - Net of Tax (c) 760 - 5,763 -
Per Share $ 0.01 $ 0.10
 
Acquisition related restructuring costs - Net of Tax (d) 78 - 3,805 -
Per Share $ 0.00 $ 0.06
 
Repositioning charges - Net of Tax (e) 2,287 - 8,063 -
Per Share $ 0.04 $ 0.13
 
Lawsuit settlement charge - Net of Tax (f) - - 4,225 -
Per Share $ - $ 0.07
 
Environmental Provision - Net of Tax (g) 36,270 - 36,270 -
Per Share $ 0.61 $ 0.61
 
Loss on business divestiture - Net of Tax (h) - - 1,055 -
Per Share $ 0.02
 
Gain on real estate divestiture - Net of Tax (i) (660 ) - (660 ) -
Per Share $ (0.01 ) $ (0.01 )
 
Withholding taxes related to acquisition funding (j) - 1,240 - 1,700
Per Share $ 0.02 $ 0.03
     
Net Income Attributable To Common Shareholders Before Special Items $ 66,814 $ 61,225 $ 197,999 $ 184,091 9.1 % 7.6 %
Per Share $ 1.12 $ 1.04 $ 3.31 $ 3.13 7.5 % 5.8 %
 
 
(a) During the three and nine months ended September 30, 2013, the Company recorded transaction costs associated with the acquisition of MEI.
 
(b) During the three months ended March 31, 2014, the Company recorded inventory step-up and backlog amortization relating to the acquisition of MEI.
 
(c) During the three and nine months ended September 30, 2014, the Company recorded integration costs associated with the acquisition of MEI.
 
(d) During the three and nine months ended September 30, 2014, the Company recorded restructuring costs associated with the acquisition of MEI.
 
(e) During the three and nine months ended September 30, 2014, the Company recorded repositioning charges associated with certain facility consolidation activities in our Fluid Handling and Aerospace & Electroncs segments. These charges primarily included severance and move costs related to the transfer of certain manufacturing operations.
 
(f) During the three months ended June 30, 2014, the Company recorded a $6.5 million charge related to the settlement of the previously disclosed environmental lawsuits by certain homeowners in Roseland, New Jersey.
 
(g) During the three months ended September 30, 2014, the Company recorded two Environmental Provisions, 1) a $49.0 million charge related to an increase in the Company's liability at its Goodyear, AZ Superfund Site, and 2) $6.8 million charge for expected remediation costs associated with a previously disclosed environmental site in Roseland, New Jersey.
 
(h) During the three month ended June 30, 2014, the Company recorded a loss on the divestiture of a small business.
 
(i) During the three month ended September 30, 2014, the Company recorded a gain on real estate divested.
 
(j) In the three and nine months ended September 30, 2013, the Company incurred withholding taxes related to the cash marshalling activities supporting the acquisition of MEI.
 
 
        2014 Full Year Guidance
 
2014 Earnings Per Share Guidance Low High
 
Earnings Per Share - GAAP basis $ 3.43 $ 3.53
 

Acquisition integration costs, inventory step-up and backlog

amortization - Net of Tax (k)

0.22 0.22
 

Anticipated facility repositioning actions, net of real estate

divestiture gains - Net of Tax (l)

0.05 0.05
 
Lawsuit settlement charge - Net of Tax (f) 0.07 0.07
 
Environmental Provision (g) 0.61 0.61
 
Loss on business divestiture - Net of Tax (h) 0.02 0.02
   
Earnings Per Share - Non-GAAP basis $ 4.40 $ 4.50
 
k) In connection with the MEI acquisition, the Company expects to incur transaction and integration related costs, and inventory step up and backlog amortization charges in a range of $18 million to $21 million. The $0.22 represents the estimated Earnings Per Share impact for the mid-point of the $18 million to $21 million range.
 
(l) In 2014, the Company expects to incur costs associated with facility repositioning actions related to the consolidation of certain smaller manufacturing sites and expects to record gains from the sale of certain Company owned real estate.
 
 
CRANE CO.
Non-GAAP Financial Measures
(in thousands)
 

CASH FLOW ITEMS

       
 
Three Months Ended   Nine Months Ended    
September 30, September 30, 2014 Full Year Guidance
2014     2013 2014     2013 Low     High
Cash Provided from Operating Activities
before Asbestos - Related Payments $ 83,601 $ 99,828 $ 159,627 $ 139,313 $ 320,000 $ 335,000
 
Asbestos Related Payments, Net of Insurance Recoveries (15,441) (19,374) (46,193) (48,314) (70,000) (65,000)
Cash Provided from Operating Activities 68,160 80,454 113,434 90,999 250,000 270,000
Less: Capital Expenditures (11,462) (6,977) (32,152) (19,016) (50,000) (40,000)
Free Cash Flow $ 56,698 $ 73,477 $ 81,282 $ 71,983 $ 200,000 $ 230,000
 
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.
 

Contact:

Crane Co.
Jason D. Feldman, 203-363-7329
Director, Investor Relations
www.craneco.com