Exhibit 99.2
CRANE CO.
Income Statement Data
(in thousands, except per share data)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Net Sales: | ||||||||||||||||
Aerospace & Electronics | $ | 165,928 | $ | 160,172 | $ | 324,379 | $ | 308,564 | ||||||||
Engineered Materials | 72,937 | 87,712 | 155,710 | 175,461 | ||||||||||||
Merchandising Systems | 116,233 | 100,563 | 229,737 | 197,927 | ||||||||||||
Fluid Handling | 301,100 | 281,206 | 589,600 | 544,157 | ||||||||||||
Controls | 37,284 | 31,244 | 72,924 | 63,006 | ||||||||||||
Total Net Sales | $ | 693,482 | $ | 660,897 | $ | 1,372,350 | $ | 1,289,115 | ||||||||
Operating Profit (Loss): | ||||||||||||||||
Aerospace & Electronics | $ | 18,487 | $ | 24,365 | $ | 34,482 | $ | 45,391 | ||||||||
Engineered Materials | 8,100 | 17,933 | 19,754 | 33,971 | ||||||||||||
Merchandising Systems | 17,339 | 11,912 | 31,477 | 21,543 | ||||||||||||
Fluid Handling | 46,556 | 33,396 | 91,318 | 64,537 | ||||||||||||
Controls | 3,547 | 2,855 | 4,847 | 5,202 | ||||||||||||
Corporate* | (7,758 | ) | (18,664 | ) | (20,258 | ) | (30,448 | ) | ||||||||
Total Operating Profit (Loss) | 86,271 | 71,797 | 161,620 | 140,196 | ||||||||||||
Interest Income | 2,883 | 989 | 5,167 | 2,302 | ||||||||||||
Interest Expense | (6,678 | ) | (6,901 | ) | (13,183 | ) | (13,769 | ) | ||||||||
Miscellaneous- Net | 1,631 | 931 | 1,961 | 2,744 | ||||||||||||
Income (Loss) Before Income Taxes | 84,107 | 66,816 | 155,565 | 131,473 | ||||||||||||
Provision for Income Taxes | 25,098 | 21,080 | 48,178 | 42,092 | ||||||||||||
Net Income (Loss) | $ | 59,009 | $ | 45,736 | $ | 107,387 | $ | 89,381 | ||||||||
Share Data: | ||||||||||||||||
Net Income (Loss) per Diluted Share | $ | 0.97 | $ | 0.75 | $ | 1.77 | $ | 1.46 | ||||||||
Average Diluted Shares Outstanding | 60,581 | 60,882 | 60,812 | 61,096 | ||||||||||||
Average Basic Shares Outstanding | 59,707 | 59,767 | 59,911 | 60,039 | ||||||||||||
Supplemental Data: | ||||||||||||||||
Cost of Sales - Operations | $ | 455,647 | $ | 452,273 | $ | 908,178 | $ | 875,957 | ||||||||
Selling, General & Administrative | 151,564 | 136,827 | 302,552 | 272,962 | ||||||||||||
Depreciation and Amortization** | 14,712 | 15,492 | 29,695 | 31,068 | ||||||||||||
Stock Compensation Expense | 3,370 | 3,072 | 6,985 | 7,376 |
* | Second quarter 2008 operating profit includes $4.4 million of recoveries related to environmental activities, and second quarter 2007 operating profit includes a $7.6 million provision for a legal settlement. |
** | Amount included within cost of sales and selling, general & administrative costs. |
CRANE CO.
Condensed Balance Sheets
(in thousands)
June 30, 2008 | December 31, 2007 | |||||
ASSETS | ||||||
Current Assets | ||||||
Cash and Cash Equivalents | $ | 321,548 | $ | 283,370 | ||
Accounts Receivable | 377,844 | 345,176 | ||||
Current Insurance Receivable - Asbestos | 33,600 | 33,600 | ||||
Inventories | 358,328 | 327,719 | ||||
Other Current Assets | 61,486 | 47,757 | ||||
Total Current Assets | 1,152,806 | 1,037,622 | ||||
Property, Plant and Equipment | 293,013 | 289,683 | ||||
Long-Term Insurance Receivable - Asbestos | 284,864 | 306,557 | ||||
Long-Term Deferred Tax Assets | 192,288 | 220,370 | ||||
Other Assets | 245,116 | 256,510 | ||||
Goodwill | 769,642 | 766,550 | ||||
Total Assets | $ | 2,937,729 | $ | 2,877,292 | ||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
Current Liabilities | ||||||
Notes Payable and Current Maturities of Long-Term Debt | $ | 3,648 | $ | 548 | ||
Accounts Payable | 191,426 | 177,978 | ||||
Current Asbestos Liability | 84,000 | 84,000 | ||||
Accrued Liabilities | 223,720 | 230,295 | ||||
Income Taxes | 9,394 | 731 | ||||
Total Current Liabilities | 512,188 | 493,552 | ||||
Long-Term Debt | 398,390 | 398,301 | ||||
Deferred Tax Liability | 33,019 | 31,880 | ||||
Long-Term Asbestos Liability | 904,469 | 942,776 | ||||
Other Liabilities | 112,696 | 117,586 | ||||
Minority Interest | 8,326 | 8,394 | ||||
Shareholders’ Equity | 968,641 | 884,803 | ||||
Total Liabilities and Shareholders’ Equity | $ | 2,937,729 | $ | 2,877,292 | ||
CRANE CO.
Condensed Statements of Cash Flows
(in thousands)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Operating Activities: | ||||||||||||||||
Net income | $ | 59,009 | $ | 45,736 | $ | 107,387 | $ | 89,381 | ||||||||
Income from joint venture | — | (1,528 | ) | — | (2,545 | ) | ||||||||||
Gain on divestitures | (932 | ) | — | (932 | ) | — | ||||||||||
Depreciation and amortization | 14,712 | 15,492 | 29,695 | 31,068 | ||||||||||||
Stock-based compensation expense | 3,370 | 3,072 | 6,985 | 7,376 | ||||||||||||
Deferred income taxes | 5,768 | 351 | 11,865 | (9,468 | ) | |||||||||||
Cash used for operating working capital | (16,454 | ) | (20,484 | ) | (46,288 | ) | (46,132 | ) | ||||||||
Other | (5,552 | ) | (2,799 | ) | (2,601 | ) | (14,131 | ) | ||||||||
Subtotal | 59,921 | 39,840 | 106,111 | 55,549 | ||||||||||||
Asbestos related payments, net of insurance recoveries | (14,553 | ) | (5,972 | ) | (16,614 | ) | 15,208 | |||||||||
Total provided by operating activities | 45,368 | 33,868 | 89,497 | 70,757 | ||||||||||||
Investing Activities: | ||||||||||||||||
Capital expenditures | (11,321 | ) | (14,868 | ) | (20,401 | ) | (21,831 | ) | ||||||||
Proceeds from disposition of capital assets | 48 | 204 | 444 | 11,236 | ||||||||||||
Proceeds from divestitures | 1,320 | — | 2,106 | — | ||||||||||||
Payment for acquisition, net of cash acquired | (47 | ) | 150 | (132 | ) | 145 | ||||||||||
Total used for investing activities | (10,000 | ) | (14,514 | ) | (17,983 | ) | (10,450 | ) | ||||||||
Financing Activities: | ||||||||||||||||
Dividends paid | (10,761 | ) | (8,989 | ) | (21,556 | ) | (18,039 | ) | ||||||||
Reacquisition of shares on the open market | — | (10,000 | ) | (40,000 | ) | (50,001 | ) | |||||||||
Stock options exercised - net of shares reacquired | 5,535 | 7,531 | 9,091 | 7,144 | ||||||||||||
Excess tax benefit from stock-based compensation | 793 | 1,437 | 900 | 2,127 | ||||||||||||
Repayment of long-term debt | — | (22 | ) | (89 | ) | |||||||||||
Net increase / decrease in short-term debt | (5,995 | ) | (10,408 | ) | 3,042 | (8,608 | ) | |||||||||
Total used for financing activities | (10,428 | ) | (20,451 | ) | (48,523 | ) | (67,466 | ) | ||||||||
Effect of exchange rate on cash and cash equivalents | 1,880 | 2,251 | 15,187 | 3,627 | ||||||||||||
Increase (decrease) in cash and cash equivalents | 26,820 | 1,154 | 38,178 | (3,532 | ) | |||||||||||
Cash and cash equivalents at beginning of period | 294,728 | 133,921 | 283,370 | 138,607 | ||||||||||||
Cash and cash equivalents at end of period | $ | 321,548 | $ | 135,075 | $ | 321,548 | $ | 135,075 | ||||||||
CRANE CO.
Order Backlog
(in thousands)
June 30, 2008 | March 31, 2008 | December 31, 2007 | June 30, 2007 | |||||||||
Aerospace & Electronics | $ | 417,883 | $ | 407,398 | $ | 392,822 | $ | 393,708 | ||||
Engineered Materials | 11,892 | 15,941 | 14,802 | 18,544 | ||||||||
Merchandising Systems | 35,708 | 42,551 | 34,093 | 32,260 | ||||||||
Fluid Handling | 297,937 | 268,302 | 242,591 | 259,144 | ||||||||
Controls | 41,633 | 34,464 | 35,273 | 35,701 | ||||||||
Total Backlog | $ | 805,053 | $ | 768,656 | $ | 719,581 | $ | 739,357 | ||||
CRANE CO.
Non-GAAP Financial Measures
(in thousands, except for per share amounts)
Three Months Ended June 30, | Six Months Ended June 30, | Percent Change Three and Six Months Ended June 30, | ||||||||||||||||||||
2008 | 2007 | 2008 | 2007 | 2008 | 2007 | |||||||||||||||||
INCOME ITEMS: | ||||||||||||||||||||||
Net Sales | $ | 693,482 | $ | 660,897 | $ | 1,372,350 | $ | 1,289,115 | 4.9 | % | 6.5 | % | ||||||||||
Operating Profit (Loss) | $ | 86,271 | $ | 71,797 | $ | 161,620 | $ | 140,196 | ||||||||||||||
Government Settlement - Pre-Tax (a) | 7,600 | 7,600 | ||||||||||||||||||||
Environmental Reimbursement - Pre-Tax (b) | (4,444 | ) | (4,444 | ) | ||||||||||||||||||
Operating Profit before Government Settlement and Environmental Reimbursement | $ | 81,827 | $ | 79,397 | $ | 157,176 | $ | 147,796 | 3.1 | % | 6.3 | % | ||||||||||
Percentage of Sales | 11.8 | % | 12.0 | % | 11.5 | % | 11.5 | % | ||||||||||||||
Net Income (Loss) | $ | 59,009 | $ | 45,736 | $ | 107,387 | $ | 89,381 | ||||||||||||||
Per Share | $ | 0.97 | $ | 0.75 | $ | 1.77 | $ | 1.46 | ||||||||||||||
Government Settlement - Net of Tax (a) | — | 5,396 | — | 5,396 | ||||||||||||||||||
Per Share | $ | 0.09 | $ | 0.09 | ||||||||||||||||||
Environmental Reimbursement - Net of Tax (b) | (2,889 | ) | (2,889 | ) | ||||||||||||||||||
Per Share | $ | (0.05 | ) | $ | (0.05 | ) | ||||||||||||||||
Net Income before Government Settlement and Environmental Reimbursement | $ | 56,120 | $ | 51,132 | $ | 104,498 | $ | 94,777 | 9.8 | % | 10.3 | % | ||||||||||
Per Share | $ | 0.93 | $ | 0.84 | $ | 1.72 | $ | 1.55 | ||||||||||||||
Average Diluted Shares Outstanding | 60,581 | 60,882 | 60,812 | 61,096 |
(a) | During the three months ended June 30, 2007, the Company recorded a settlement with the US Government. |
(b) | During the three months ended June 30, 2008, the Company recorded a $2.1 million reimbursement from the US Government and a $2.4 million reimbursement from a service provider, both related to environmental clean-up activities. |
June 30, 2008 | December 31, 2007 | |||||||
BALANCE SHEET ITEMS | ||||||||
Notes Payable and Current Maturities of Long-Term Debt | $ | 3,648 | $ | 548 | ||||
Long-Term Debt | 398,390 | 398,301 | ||||||
Total Debt | 402,038 | 398,849 | ||||||
Less: Cash and Cash Equivalents | (321,548 | ) | (283,370 | ) | ||||
Net Debt | 80,490 | 115,479 | ||||||
Shareholders’ Equity | 968,641 | 884,803 | ||||||
Net Capitalization | $ | 1,049,131 | $ | 1,000,282 | ||||
Percentage of Net Debt to Net Capitalization | 7.7 | % | 11.5 | % |
Three Months Ended June 30, | Six Months Ended June 30, | Year Ended December 31, | |||||||||||||||||||||
2008 | 2007 | 2008 | 2007 | 2008 | 2007 | ||||||||||||||||||
(Estimated) | |||||||||||||||||||||||
CASH FLOW ITEMS | |||||||||||||||||||||||
Cash Provided from Operating Activities before Asbestos - Related Payments | $ | 59,921 | $ | 39,840 | $ | 106,111 | $ | 55,549 | 275,000 | $ | 243,031 | ||||||||||||
Asbestos Related Payments, Net of Insurance Recoveries | (14,553 | ) | (5,972 | ) | (16,614 | ) | (16,292 | ) | (55,000 | ) | (41,698 | ) | |||||||||||
Equitas Receipts | — | — | — | 31,500 | — | 31,500 | |||||||||||||||||
Cash Provided from Operating Activities | 45,368 | 33,868 | 89,497 | 70,757 | 220,000 | 232,833 | |||||||||||||||||
Less: Capital Expenditures | (11,321 | ) | (14,868 | ) | (20,401 | ) | (21,831 | ) | (50,000 | ) | (47,169 | ) | |||||||||||
Free Cash Flow | $ | 34,047 | $ | 19,000 | $ | 69,096 | $ | 48,926 | 170,000 | $ | 185,664 | ||||||||||||
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 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.