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Crane Co. Reports First Quarter Earnings

Dépèche transmise le 23 avril 2012 par Business Wire

Crane Co. Reports First Quarter Earnings

Crane Co. Reports First Quarter Earnings

STAMFORD, Conn.--(BUSINESS WIRE)--Crane Co. (NYSE: CR), a diversified manufacturer of highly engineered industrial products, reported that first quarter 2012 earnings per diluted share increased 8% to $0.88 compared to $0.81 in the first quarter of 2011. First quarter 2011 results include a gain of $4.3 million, or $0.05 per share, related to the sale of a building and the divestiture of a small product line.

“Record first quarter earnings were driven by our Aerospace & Electronics and Fluid Handling segments, which are benefiting from their exposure to late cycle end markets”

First quarter 2012 sales of $658 million increased $47 million, or 8%, compared to the first quarter of 2011, resulting from a core sales increase of $48 million (8%), an increase in sales from acquisitions, net of divestitures, of $4 million (1%), and unfavorable foreign currency translation of $5 million (-1%).

First quarter 2012 operating profit increased 9% to $79.6 million, compared to $72.9 million in the first quarter of 2011, and operating profit margin increased to 12.1%, compared to 11.9% in the first quarter of 2011.

“Record first quarter earnings were driven by our Aerospace & Electronics and Fluid Handling segments, which are benefiting from their exposure to late cycle end markets,” said Crane Co. president and chief executive officer Eric C. Fast. “We have started off 2012 with robust demand in our later, longer cycle businesses, including strong orders and a growing backlog. We are on track to deliver full year EPS in line with our $3.75-$3.95 guidance and free cash flow in the range of $160-$190 million.”

Cash Flow and Financial Position

Cash used for operating activities in the first quarter of 2012 was $42.8 million, compared to cash used for operating activities of $16.2 million in the first quarter of 2011, reflecting an increase in working capital. The Company’s cash position at March 31, 2012 was $196 million, as compared to $245 million at December 31, 2011.

Segment Results

All comparisons detailed in this section refer to the first quarter 2012 versus the first quarter 2011.

Aerospace & Electronics                            
 
First Quarter Change
(dollars in millions) 2012 2011
 
Sales $175.2 $161.9 $13.2 8%
 
Operating Profit $38.1 $34.0 $4.0 12%
 
Profit Margin 21.7% 21.0%
 

First quarter 2012 sales increased $13.2 million, or 8%, reflecting a $10.2 million (10%) improvement in Aerospace Group sales and an increase of $3.0 million (5%) in Electronics Group revenue. The Aerospace Group sales increase reflected higher OEM and aftermarket shipments for both commercial and military applications, while Electronics Group sales growth was primarily driven by strength in Power Solutions. Segment operating profit of $38.1 million increased by $4.0 million, or 12%, reflecting strong sales growth and margin improvement in Aerospace.

Aerospace & Electronics order backlog was $438 million at March 31, 2012, as compared to $411 million at December 31, 2011 and $455 million at March 31, 2011.

Engineered Materials                            
 
First Quarter Change
(dollars in millions) 2012 2011
 
Sales $58.2 $61.8 ($3.7) (6%)
 
Operating Profit $8.4 $10.1 ($1.7) (17%)
 
Profit Margin 14.5% 16.4%
 

Segment sales of $58.2 million declined 6% compared to the first quarter of 2011, as a result of lower demand from transportation and recreational vehicle customers, slightly offset by a modest increase in building products sales. Operating profit decreased 17% primarily reflecting the lower sales.

Merchandising Systems

      First Quarter       Change    
(dollars in millions) 2012       2011      
 
Sales $87.7 $94.9 ($7.2) (8%)
 
Operating Profit $4.7 $4.7 - 1%
 
Profit Margin 5.4% 4.9%
 

Merchandising Systems sales of $87.7 million decreased $7.2 million, or 8%, reflecting lower sales in Payment Solutions and, to a lesser extent, Vending. Operating profit of $4.7 million in 2012 includes costs incurred to settle a lawsuit. Solid productivity improvements offset the deleverage impact of the lower sales.

Fluid Handling

      First Quarter       Change    
(dollars in millions) 2012       2011      
 
Sales $301.9 $264.1 $37.7 14%
 
Operating Profit $39.6 $35.5 $4.2 12%
 
Profit Margin 13.1% 13.4%

First quarter 2012 sales increased $37.7 million, or 14%, which included a core sales increase of $37.4 million (14%), $4.4 million from the acquisition of WTA (2%), and unfavorable foreign currency translation of $4.1 million (-2%). Sales were broadly higher across Fluid Handling end markets. Orders from ChemPharma and Energy customers strengthened markedly on both a year over year and sequential basis. Operating profit increased to $39.6 million while operating margin declined slightly to 13.1%, reflecting throughput inefficiencies in certain European operations. Backlog increased to $338 million at March 31, 2012, compared to $314 million at December 31, 2011 and $305 million at March 31, 2011.

Controls

      First Quarter       Change    
(dollars in millions) 2012       2011      
 
Sales $35.0 $28.2 $6.8 24%
 
Operating Profit $4.7 $3.1 $1.6 51%
 
Profit Margin 13.4% 11.0%
 

First quarter 2012 sales of $35.0 million increased 24%, primarily reflecting improvement in industrial, transportation and upstream oil and gas related demand. Operating profit increased 51%, reflecting leverage of the higher sales volume.

Full Year 2012 Guidance

As detailed at our February Investor Day Conference, sales for 2012 are expected to increase approximately 3-5% driven by a core sales increase of 5-6%, incremental sales from the WTA acquisition of less than 1%, partially offset by unfavorable foreign exchange of approximately 2%. 2012 earnings guidance is a range of $3.75 - $3.95 per diluted share, reflecting revenue and profit growth across all segments. The Company’s 2012 free cash flow (cash provided by operating activities less capital spending) guidance of $160 - $190 million includes the effect of asbestos related cash flows.

Additional Information

Please see the condensed financial statements and 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 first quarter financial results on Tuesday, April 24, 2012 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 processing, petrochemical, 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, South America, Europe, 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, 2011 and subsequent reports filed with the Securities and Exchange Commission.

 
CRANE CO.
Income Statement Data
(in thousands, except per share data)
   
Three Months Ended
March 31,

   2012   

   2011   

Net Sales:
Aerospace & Electronics $ 175,168 $ 161,936
Engineered Materials 58,159 61,832
Merchandising Systems 87,675 94,878
Fluid Handling 301,886 264,142
Controls 34,991   28,232  
Total Net Sales $ 657,879   $ 611,020  
 
Operating Profit (Loss):
Aerospace & Electronics $ 38,069 $ 34,042
Engineered Materials 8,409 10,143
Merchandising Systems 4,713 4,673
Fluid Handling 39,640 35,453
Controls 4,701 3,111
Corporate (15,972 ) (14,562 )
Total Operating Profit 79,560 72,860
 
Interest Income 395 290
Interest Expense (6,711 ) (6,622 )
Miscellaneous- Net (347 ) 3,625

 

*

Income Before Income Taxes 72,897 70,153
Provision for Income Taxes 21,101   21,775  
Net income before allocations to noncontrolling interests 51,796 48,378
Less: Noncontrolling interest in subsidiaries' gains (losses) 134   (89 )
Net income attributable to common shareholders $ 51,662   $ 48,467  
 
Share Data:
Earnings per Diluted Share $ 0.88   $ 0.81  
 
Average Diluted Shares Outstanding 58,880 59,552
Average Basic Shares Outstanding 57,889 58,330
 

Supplemental Data:

Cost of Sales $ 437,471 $ 397,850
Selling, General & Administrative 140,848 140,310
Depreciation and Amortization ** 14,674 15,774
Stock-Based Compensation Expense 4,007 3,503
 
* Primarily related to the sale of a building and the divestiture of a small product line in the three months ended March 31, 2011.
 
** Amount included within cost of sales and selling, general & administrative costs.
 
 
CRANE CO.
Condensed Balance Sheets
(in thousands)
   

 March 31, 

December 31,
2012 2011
 
ASSETS
Current Assets
Cash and Cash Equivalents $ 195,860 $ 245,089
Accounts Receivable, net 404,418 349,250
Current Insurance Receivable - Asbestos 16,345 16,345
Inventories, net 368,495 360,689
Other Current Assets 64,092 60,859
Total Current Assets 1,049,210 1,032,232
 
Property, Plant and Equipment, net 284,289 284,146
Long-Term Insurance Receivable - Asbestos 204,929 208,952
Other Assets 485,268 497,377
Goodwill 826,717 820,824
 
Total Assets $ 2,850,413 $ 2,843,531
 
LIABILITIES AND EQUITY
Current Liabilities
Notes Payable and Current Maturities of Long-Term Debt $ 794 $ 1,112
Accounts Payable 184,319 194,158
Current Asbestos Liability 100,943 100,943
Accrued Liabilities 187,006 226,717
Income Taxes 14,745 10,165
Total Current Liabilities 487,807 533,095
 
Long-Term Debt 398,958 398,914
Long-Term Deferred Tax Liability 42,664 41,668
Long-Term Asbestos Liability 770,443 792,701
Other Liabilities 254,685 255,097
 
Total Equity 895,856 822,056
 
Total Liabilities and Equity $ 2,850,413 $ 2,843,531
 

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CRANE CO.
Condensed Statements of Cash Flows
(in thousands)
 
Three Months Ended
March 31,
2012 2011
Operating Activities:
Net income attributable to common shareholders $ 51,662 $ 48,467
Noncontrolling interest in subsidiaries' gains (losses)   134     (89 )
Net income before allocations to noncontrolling interests 51,796 48,378
Gain on divestiture - (4,258 )
Depreciation and amortization 14,674 15,774
Stock-based compensation expense 4,007 3,503
Defined benefit plans and postretirement expense 4,991