Business Wire | Oct 26, 2020 05:01PM EDT

Crane Co. Reports Third Quarter 2020 Results

Oct. 26, 2020

STAMFORD, Conn.--(BUSINESS WIRE)--Oct. 26, 2020--Crane Co. (NYSE: CR), a diversified manufacturer of highly engineered industrial products, reported third quarter 2020 GAAP earnings per diluted share (EPS) of $0.97, compared to $1.19 in the third quarter of 2019. Excluding Special Items, third quarter 2020 EPS was $1.05, compared to $1.40 in the third quarter of 2019. (Please see the attached Non-GAAP Financial Measures tables for a detailed reconciliation of reported results to adjusted measures.)

Third quarter 2020 sales were $735 million, a decline of 5% compared to the third quarter of 2019. The sales decline was comprised of a $104 million, or 13%, decline in core sales, partially offset by a $57 million, or 7%, benefit from acquisitions and $10 million, or 1%, of favorable foreign exchange. The core sales decline was attributable to COVID-19 related macroeconomic factors.

Third quarter 2020 operating profit was $85 million compared to $109 million in the third quarter of 2019. Operating profit margin was 11.6% compared to 14.2% in the third quarter of 2019. Excluding Special Items, third quarter 2020 operating profit was $92 million compared to $114 million in the third quarter of 2019. Excluding Special Items, operating profit margin was 12.4% compared to 14.8% in the third quarter of 2019. (Please see the attached Non-GAAP Financial Measures tables for a detailed reconciliation of reported results to adjusted measures.)

Max Mitchell, Crane Co. President and Chief Executive Officer stated: "While uncertainty remains elevated, the year has progressed largely as we expected when we reset guidance in April. Our teams continue to execute extremely well in this challenging environment, and we are pleased with our third quarter results which were solid in light of current market conditions. We have further narrowed our guidance range to reflect that we now have only a few months left of the year, and we raised the midpoint of our guidance primarily to reflect operational outperformance year-to-date compared to our expectations, as well as some recent incremental strength at Crane Currency and Engineered Materials. I continue to remain highly confident in the strength and resilience of Crane's portfolio and in our long-term outlook as end markets continue to recover."

Cash Flow, Liquidity, and Other Financial Metrics

Cash provided from operating activities in the third quarter of 2020 was $132 million compared to $119 million in the third quarter of 2019. Capital expenditures in the third quarter of 2020 were $7 million compared to $15 million in the third quarter of 2019. Third quarter 2020 free cash flow (cash provided by operating activities less capital spending) was $124 million compared to $104 million in the third quarter of 2019.

Cash provided from operating activities in the first nine months of 2020 was $208 million compared to $171 million in the first nine months of 2019. Capital expenditures in the first nine months of 2020 were $21 million compared to $51 million in the first nine months of 2019. Free cash flow for the first nine months of 2020 was $188 million compared to $120 million in the first nine months of 2019.

The Company held $605 million in cash and short-term investments at September 30, 2020, compared to $394 million at December 31, 2019. Total debt was $1,324 million at September 30, 2020, compared to $991 million at December 31, 2019. As of September 30, 2020, liquidity of approximately $1,018 million was comprised of $605 million in cash and short-term investments, and $413 million available under our revolving credit facility.

Third Quarter 2020 Segment Results

All comparisons detailed in this section refer to operating results for the third quarter 2020 versus the third quarter 2019.

Fluid Handling



Third Quarter Change

(dollars in millions) 2020 2019

Sales $ 252 $ 276 $ (24 ) (9 %)



Operating Profit $ 26 $ 35 $ (10 ) (27 %)

Operating Profit, before Special Items* $ 29 $ 38 $ (9 ) (24 %)



Profit Margin 10.3 % 12.8 %

Profit Margin, before Special Items* 11.4 % 13.8 %



*Please see the attached Non-GAAP Financial Measures tables

Sales of $252 million decreased $24 million, or 9%, driven by a $42 million, or 15%, decline in core sales, partially offset by a $15 million, or 5%, benefit from an acquisition and $4 million, or 1%, of favorable foreign exchange. Operating profit margin declined to 10.3%, compared to 12.8% last year, primarily reflecting lower volumes, partially offset by productivity and cost reduction measures. Excluding Special Items, operating profit margin declined to 11.4%, compared to 13.8% last year. Fluid Handling order backlog was $305 million at September 30, 2020 which includes $11 million related to the January 2020 I&S acquisition, compared to $267 million at December 31, 2019, and compared to $272 million at September 30, 2019.

Payment & Merchandising Technologies

Third Quarter Change

(dollars in millions) 2020 2019

Sales $ 277 $ 249 $ 28 11 %

Sales, including acquisition-related deferred $ 280 $ 249 $ 31 12 %revenue*



Operating Profit $ 41 $ 35 $ 5 15 %

Operating Profit, before Special Items* $ 44 $ 36 $ 8 23 %



Profit Margin 14.6 % 14.1 %

Profit Margin, before Special Items* 15.8 % 14.5 %





*Please see the attached Non-GAAP Financial Measures tables

Sales of $277 million increased $28 million, or 11%, driven by a $42 million, or 17%, benefit from an acquisition, and $6 million, or 2%, of favorable foreign exchange, partially offset by a $19 million, or 8%, decline in core sales. Including $2.6 million of acquisition-related deferred revenue, sales in the third quarter of 2020 were $280 million. Operating profit margin increased to 14.6%, from 14.1% last year as productivity and benefits from cost saving measures more than offset the impact of lower volumes. Excluding Special Items, operating profit margin increased to 15.8%, from 14.5% last year.

Aerospace & Electronics

Third Quarter Change

(dollars in millions) 2020 2019

Sales $ 157 $ 197 $ (40 ) (20 %)



Operating Profit $ 25 $ 47 $ (23 ) (48 %)

Operating Profit, before Special Items* $ 25 $ 48 $ (24 ) (49 %)



Profit Margin 15.6 % 23.9 %

Profit Margin, before Special Items* 15.6 % 24.4 %



*Please see the attached Non-GAAP Financial Measures tables

Sales of $157 million decreased $40 million, or 20%, driven by lower core sales. Operating profit margin declined to 15.6%, from 23.9% last year, primarily reflecting lower core volumes, partially offset by strong productivity and the benefit of cost reduction measures. Excluding Special Items, operating profit margin declined to 15.6%, from 24.4% last year. Aerospace & Electronics' order backlog was $498 million at September 30, 2020, compared to a record $567 million at December 31, 2019, and compared to $564 million at September 30, 2019.

Engineered Materials



Third Quarter Change

(dollars in millions) 2020 2019

Sales $ 48 $ 50 $ (2 ) (4 %)



Operating Profit $ 9 $ 6 $ 3 53 %



Profit Margin 18.6 % 11.8 %

Sales decreased $2 million, or 4%, driven primarily by lower sales to the Building Products market, partially offset by stronger sales to Recreational Vehicle customers. Operating profit margin increased to 18.6%, from 11.8% last year, primarily reflecting productivity, the benefit of cost reduction measures, and lower material costs.

Updating Full Year Outlook

The Company's current and best estimate of full-year 2020 GAAP EPS is now $3.10-$3.35, compared to the prior range of $2.65-$3.45. Excluding Special Items, the Company's current and best estimate of full-year 2020 EPS is now $3.75-$4.00, compared to the prior range of $3.30-$4.10. We now expect a full-year 2020 core sales decline of approximately 17% to 19%, compared to our prior expectation of a decline in the range of 17% to 21%. Our revised outlook for full-year 2020 free cash flow (cash provided by operating activities less capital spending) is now $230-$260 million compared to our prior outlook for a range of $200-$250 million. (Please see the attached non-GAAP Financial Measures tables.)

We note that continued uncertainty regarding the potential impact of the COVID-19 pandemic on demand and operations poses unique and substantial challenges for normal forecasting methodologies, making it difficult to accurately project future financial results.

Additional Information

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 27, 2020 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 under Investors, Events & Presentations. 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 Co. provides products and solutions to customers in the chemicals, oil & gas, power, automated payment solutions, banknote design and production and aerospace & defense markets, along with a wide range of general industrial and consumer related end markets. The Company has four business segments: Fluid Handling, Payment & Merchandising Technologies, Aerospace & Electronics and Engineered Materials. Crane Co. has approximately 11,000 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 are based on the management's current beliefs, expectations, plans, assumptions and objectives regarding Crane Co.'s future financial performance and are subject to significant risks and uncertainties. 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, including risks and uncertainties related to the ongoing COVID-19 pandemic, that could cause actual results or outcomes to differ materially from those expressed or implied in these forward-looking statements. Such factors also include, among others: uncertainties regarding the extent and duration of the impact of the COVID-19 pandemic on many aspects of our business, operations and financial performance; changes in economic, financial and end-market conditions in the markets in which we operate;fluctuations in raw material prices; the financial condition of our customers and suppliers; economic, social and political instability, currency fluctuation and other risks of doing business outside of the United States; competitive pressures, including the need for technology improvement, successful new product development and introduction and any inability to pass increased costs of raw materials to customers; our ability to value and successfully integrate acquisitions, to realize synergies and opportunities for growth and innovation, and to attract and retain highly qualified personnel and key management; a reduction in congressional appropriations that affect defense spending and our ability to predict the timing and award of substantial contracts in our banknote business; adverse effects on our business and results of operations, as a whole, as a result of increases in asbestos claims or the cost of defending and settling such claims; adverse effects as a result of environmental remediation activities, costs, liabilities and related claims; investment performance of our pension plan assets and fluctuations in interest rates, which may affect the amount and timing of future pension plan contributions; and other risks noted in reports that we file with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and subsequent reports filed with the Securities and Exchange Commission. Crane Co. does not undertake any obligation to update or revise any forward-looking statements.

(Financial Tables Follow)

CRANE CO.

Income Statement Data

(in millions, except per sharedata)

Three Months Ended Nine Months Ended

September 30, September 30,

2020 2019 2020 2019

Net sales:

Fluid Handling $ 252.3 $ 276.1 $ 748.2 $ 840.4

Payment & Merchandising 277.2 248.9 822.1 843.7 Technologies

Aerospace & Electronics 157.0 197.2 507.3 596.3

Engineered Materials 48.3 50.1 132.9 165.2

Total net sales 734.8 772.3 2,210.5 2,445.6



Operating profit (loss):

Fluid Handling 25.9 35.4 74.1 106.8

Payment & Merchandising 40.5 35.1 68.9 124.8 Technologies

Aerospace & Electronics 24.5 47.2 87.8 141.4

Engineered Materials 9.0 5.9 17.7 22.8

Corporate (15.0 ) (14.3 ) (44.5 ) (50.0 )

Total operating profit 84.9 109.3 204.0 345.8



Interest income 0.6 0.6 1.3 1.9

Interest expense (14.4 ) (11.7 ) (41.3 ) (35.0 )

Miscellaneous, net 4.3 (4.5 ) 10.6 3.9

Income before income 75.4 93.7 174.6 316.6 taxes

Provision for income 18.8 21.1 40.4 70.5 taxes

Net income beforeallocation to 56.6 72.6 134.2 246.1 noncontrollinginterests



Less: Noncontrollinginterest in - 0.1 - 0.2 subsidiaries' earnings



Net income attributable $ 56.6 $ 72.5 $ 134.2 $ 245.9 to common shareholders



Share data:

Earnings per diluted $0.97 $1.19 $2.28 $4.05share



Average diluted shares 58.5 60.8 58.9 60.8outstanding

Average basic shares 58.1 60.0 58.4 59.9outstanding



Supplemental data:

Cost of sales $ 480.0 $ 494.4 $ 1,445.3 $ 1,557.4

Selling, general & 169.9 168.6 561.2 542.4 administrative

Acquisition-related and 2.7 0.2 10.3 3.7 integration charges ^1

Repositioning related 1.4 4.5 26.5 16.2 charges, net ^1, 2

Depreciation and 32.4 27.9 95.3 84.2 amortization ^1

Stock-based 5.7 5.6 16.2 16.8 compensation expense^ 1

1 Amounts included within cost of sales and/or selling, general & administrative costs.

2 Repositioning related charges in 2020 primarily consist of COVID-19 related severance and, to a lesser extent, acquisition-related repositioning and facility consolidation.

Totals may not sum due to rounding

CRANE CO.

Condensed Balance Sheets

(in millions)

September December 31, 30, 2019 2020

Assets

Current assets

Cash and cash equivalents $ 544.6 $ 393.9

Accounts receivable, net 439.5 555.1

Current insurance receivable - asbestos 14.1 14.1

Inventories, net 456.0 457.3

Other current assets 167.9 79.5

Total current assets 1,622.1 1,499.9



Property, plant and equipment, net 595.6 616.3

Long-term insurance receivable - asbestos 74.5 83.6

Other assets 741.0 751.5

Goodwill 1,589.8 1,472.4



Total assets $ 4,623.0 $ 4,423.7



Liabilities and equity

Current liabilities

Short-term borrowings $ 481.4 $ 149.4

Accounts payable 225.8 311.1

Current asbestos liability 65.0 65.0

Accrued liabilities 361.7 378.2

Income taxes 9.2 13.0

Total current liabilities 1,143.1 916.7



Long-term debt 842.7 842.0

Long-term deferred tax liability 54.4 55.8

Long-term asbestos liability 614.2 646.6

Other liabilities 459.5 486.3



Total equity 1,509.1 1,476.3



Total liabilities and equity $ 4,623.0 $ 4,423.7

Totals may not sum due to rounding

CRANE CO.

Condensed Statements of Cash Flows

(in millions)

Three Months Ended Nine Months Ended September 30, September 30,

2020 2019 2020 2019

Operating activities:

Net income attributable to $ 56.6 $ 72.5 $ 134.2 $ 245.9 common shareholders

Noncontrolling interest in - 0.1 - 0.2 subsidiaries' earnings

Net income before allocations 56.6 72.6 134.2 246.1 to noncontrolling interests

Loss on deconsolidation of - - - 1.2 joint venture

Unrealized loss on marketable - 3.1 - - securities

Realized gain on marketable - (1.1 ) - (1.1 )securities

Depreciation and amortization 32.4 27.9 95.3 84.2

Stock-based compensation 5.7 5.6 16.2 16.8 expense

Defined benefit plans and (1.8 ) 3.6 (4.5 ) (0.4 )postretirement (credit) cost

Deferred income taxes - 8.0 7.5 18.8

Cash provided by (used for) 45.9 14.3 (8.2 ) (157.1 )operating working capital

Defined benefit plans and (0.8 ) (0.9 ) (3.1 ) (6.0 )postretirement contributions

Environmental payments, net of 0.8 (2.5 ) (2.9 ) (6.5 )reimbursements

Other (2.8 ) (1.0 ) (2.7 ) 4.0

Subtotal 136.0 129.6 231.8 200.0

Asbestos related payments, net (4.5 ) (11.1 ) (23.7 ) (29.0 )of insurance recoveries

Total provided by operating 131.5 118.5 208.1 171.0 activities



Investing activities:

Proceeds from (payments for)acquisitions, net of cash 3.1 - (169.2 ) - acquired

Proceeds from disposition of 1.2 0.4 3.9 1.3 capital assets

Capital expenditures (7.1 ) (14.8 ) (20.6 ) (50.9 )

Impact of deconsolidation of - - - (0.2 )joint venture

Purchase of marketable (60.0 ) - (60.0 ) (8.8 )securities

Proceeds from sale of - 9.9 - 9.9 marketable securities

Total used for investing (62.8 ) (4.5 ) (245.9 ) (48.7 )activities



Financing activities:

Dividends paid (25.0 ) (23.4 ) (75.4 ) (70.1 )

Reacquisition of shares on open - - (70.0 ) - market

Stock options exercised, net of 3.5 1.4 4.2 2.6 shares reacquired

Debt issuance costs - - (1.3 ) -

Repayment of long-term debt - (1.7 ) - (4.5 )

Proceeds from issuance of - - - 3.0 long-term debt

Proceeds from issuance ofcommercial paper with - - 251.3 - maturities greater than 90 days

Repayments of commercial paperwith maturities greater than 90 (92.1 ) - (188.6 ) - days

Net repayments of commercialpaper with maturities of 90 (14.0 ) - (76.8 ) - days or less

Proceeds from revolving credit - - 77.2 - facility

Repayments from revolving - - (77.2 ) - credit facility

Proceeds from term loan - - 343.9 -

Total (used for) provided by (127.6 ) (23.7 ) 187.3 (69.0 )financing activities

Effect of exchange rate on cash 11.4 (8.5 ) 1.2 (7.9 )and cash equivalents

(Decrease) increase in cash and (47.5 ) 81.8 150.7 45.4 cash equivalents

Cash and cash equivalents at 592.1 307.0 393.9 343.4 beginning of period

Cash and cash equivalents at $ 544.6 $ 388.8 $ 544.6 $ 388.8 end of period

Totals may not sum due to rounding

CRANE CO.

Order Backlog

(in millions)

September June 30, March 31, December September 30, 2020 2020 31, 30, 2020 2019 2019

Fluid $ 304.8 ^ $ 298.6 ^ $ 293.4 ^ $ 267.0 $ 272.1 Handling 1 1 1

Payment & ^ ^ ^ ^Merchandising 270.1 2 285.5 2 326.3 2 311.4 2 291.8 Technologies

Aerospace & 498.1 505.7 547.5 567.4 564.3 Electronics

Engineered 11.1 10.1 10.8 9.4 10.1 Materials

Total backlog $ 1,084.1 $ 1,099.9 $ 1,178.0 $ 1,155.2 $ 1,138.3

1 Includes $11 million, $11 million and $12 million as of September 30, 2020 June 30, 2020 and March 31, 2020, respectively, of backlog pertaining to the I&S business acquired in January 2020

2 Includes $40 million, $46 million, $43 million and $44 million as of September 30, 2020, June 30, 2020, March 31, 2020 and December 31, 2019, respectively, of backlog pertaining to the Cummins Allison business acquired in December 2019.

Totals may not sum due to rounding

CRANE CO.

Non-GAAP Financial Measures

(in millions, except pershare data)

Three Months Ended Nine Months Ended Percent Change September 30, September 30,

2020 2019 2020 2019 Three Nine Months Months

INCOME ITEMS



Net sales - GAAP $ 734.8 $ 772.3 $ 2,210.5 $ 2,445.6 (4.9 ) (9.6 ) % %

Acquisition-related 2.6 - 7.7 - deferred revenue ^1

Net sales before $ 737.4 $ 772.3 $ 2,218.2 $ 2,445.6 (4.5 ) (9.3 )special items % %



Operating profit - 84.9 109.3 204.0 345.8 (22.3 ) (41.0 )GAAP % %

Percentage of sales 11.6 % 14.2 % 9.2 % 14.1 %



Special itemsimpacting operating profit:

Acquisition-related 2.6 - 7.7 - deferred revenue ^1

Acquisition-relatedand integration 2.7 0.2 10.3 3.7 charges

Repositioningrelated charges, 1.4 4.5 26.5 16.2 net of gain onproperty sale^ 2

Operating profit ) )before special $ 91.6 $ 114.0 $ 248.5 $ 365.7 (19.6 % (32.0 %items

Percentage of sales 12.4 % 14.8 % 11.2 % 15.0 %



Net incomeattributable to $ 56.6 $ 72.5 $ 134.2 $ 245.9 (21.9 ) (45.4 )common shareholders % %- GAAP

Per diluted share $ 0.97 $ 1.19 $ 2.28 $ 4.05 (18.5 ) (43.7 ) % %



Special itemsimpacting netincome attributable to commonshareholders:

Acquisition-relateddeferred revenue - 1.9 - 5.7 - net of tax ^1

Per diluted share $ 0.03 $ 0.10

Acquisition-relatedand integration 2.1 0.1 7.9 2.6 charges - net oftax

Per diluted share $ 0.04 $ 0.00 $ 0.13 0.04

Repositioningrelated charges,net of gain on 1.0 6.2 19.9 16.6 property sale - netof tax ^2

Per diluted share $ 0.02 $ 0.10 $ 0.34 $ 0.27

Unrealized gain onmarketable - 2.5 - - securities - net oftax

Per diluted share $ 0.04

Realized gain onmarketable - (0.8 ) - (0.8 ) securities - net oftax

Per diluted share $ (0.01 ) $ 0.00

Impact of non-cashpension cost - 4.5 - 4.5 adjustment - net oftax

Per diluted share $ 0.07 $ 0.07

Deconsolidation ofjoint venture - net - - - 0.8 of tax

Per diluted share $ 0.01

Net incomeattributable to ) )common shareholders $ 61.6 $ 85.0 $ 167.7 $ 269.6 (27.5 % (37.8 %before specialitems

Per diluted share $ 1.05 $ 1.40 $ 2.85 $ 4.44 (24.7 ) (35.9 ) % %

Three Months Ended September 30,

Nine Months Ended September 30,

2020

2019

2020

2019

Special items impacting provision for income taxes:

Provision for income taxes - GAAP

$

18.8

$

21.1

$

40.4

$

70.5

Tax effect of acquisition-related deferred revenue 1

0.7

-

2.0

-

Tax effect of acquisition-related and integration charges

0.6

0.1

2.4

1.1

Tax effect of repositioning related charges 2

0.4

(1.7

)

6.6

1.4

Tax effect of unrealized loss on marketable securities

-

0.7

-

(0.7

)

Tax effect of realized gain on marketable securities

-

(0.3

)

-

-

Tax effect of deconsolidation of joint venture

-

-

-

0.4

Tax effect of impact of non-cash pension cost adjustment

-

1.3

-

-

Provision for income taxes before special items

$

20.5

$

21.2

$

51.4

$

72.7

1 Acquisition-related revenue that would otherwise be recognized but for the purchase accounting treatment of acquisitions.

2 Repositioning related charges in 2020 primarily consist of COVID-19 related severance and, to a lesser extent, acquisition-related repositioning and facility consolidation.

Totals may not sum due to rounding

Three Months Ended Nine Months Ended September 30, September 30,

2020 2019 2020 2019

Special items impacting provision for income taxes:

Provision for income taxes - GAAP $ 18.8 $ 21.1 $ 40.4 $ 70.5

Tax effect of acquisition-related 0.7 - 2.0 - deferred revenue ^1

Tax effect of acquisition-related and 0.6 0.1 2.4 1.1 integration charges

Tax effect of repositioning related 0.4 (1.7 ) 6.6 1.4 charges ^2

Tax effect of unrealized loss on - 0.7 - (0.7 )marketable securities

Tax effect of realized gain on - (0.3 ) - - marketable securities

Tax effect of deconsolidation of joint - - - 0.4 venture

Tax effect of impact of non-cash pension - 1.3 - - cost adjustment

Provision for income taxes before $ 20.5 $ 21.2 $ 51.4 $ 72.7 special items

1 Acquisition-related revenue that would otherwise be recognized but for the purchase accounting treatment of acquisitions.

2 Repositioning related charges in 2020 primarily consist of COVID-19 related severance and, to a lesser extent, acquisition-related repositioning and facility consolidation.

Totals may not sum due to rounding

CRANE CO.

Non-GAAP Financial Measures

Segment Information

(in millions)

For the three Fluid Payment & Aerospace & Engineered Totalmonths ended Handling Merchandising Electronics Materials Corporate CompanySeptember 30, 2020 Technologies

Net sales - GAAP $ 252.3 $ 277.2 $ 157.0 $ 48.3 $ - $ 734.8

Acquisition-related - 2.6 - - - 2.6 deferred revenue^1

Net sales before $ 252.3 $ 279.8 $ 157.0 $ 48.3 $ - $ 737.4 special items



Operating profit 25.9 40.5 24.5 9.0 (15.0 ) 84.9 (loss) - GAAP

Acquisition-related - 2.6 - - - 2.6 deferred revenue^1

Acquisition-relatedand integration 1.7 1.0 - - - 2.7 charges

Repositioningrelated charges, 1.2 0.2 - - - 1.4 net ^2

Operating profit(loss) before $ 28.8 $ 44.3 $ 24.5 $ 9.0 $ (15.0 ) $ 91.6 special items

Percentage of sales 11.4 % 15.8 % 15.6 % 18.6 % 12.4 %

For the three months ended September 30, 2019

Fluid Handling

Payment & Merchandising Technologies

Aerospace & Electronics

Engineered Materials

Corporate

Total Company

Net sales

$

276.1

$

248.9

$

197.2

$

50.1

$

-

$

772.3

Operating profit (loss) - GAAP

35.4

35.1

47.2

5.9

(14.3

)

109.3

Acquisition-related and integration charges

-

0.1

-

-

0.1

0.2

Repositioning related charges, net

2.6

0.9

1.0

-

-

4.5

Operating profit (loss) before special items

$

38.0

$

36.1

$

48.2

$

5.9

$

(14.2

)

$

114.0

Percentage of sales

13.8

%

14.5

%

24.4

%

11.8

%

14.8

%

For the three Fluid Payment & Aerospace & Engineered Totalmonths ended Handling Merchandising Electronics Materials Corporate CompanySeptember 30, 2019 Technologies

Net sales $ 276.1 $ 248.9 $ 197.2 $ 50.1 $ - $ 772.3



Operating profit 35.4 35.1 47.2 5.9 (14.3 ) 109.3 (loss) - GAAP

Acquisition-relatedand integration - 0.1 - - 0.1 0.2 charges

Repositioningrelated charges, 2.6 0.9 1.0 - - 4.5 net

Operating profit(loss) before $ 38.0 $ 36.1 $ 48.2 $ 5.9 $ (14.2 ) $ 114.0 special items

Percentage of sales 13.8 % 14.5 % 24.4 % 11.8 % 14.8 %

For the nine months ended September 30, 2020

Fluid Handling

Payment & Merchandising Technologies

Aerospace & Electronics

Engineered Materials

Corporate

Total Company

Net sales - GAAP

$

748.2

$

822.1

$

507.3

$

132.9

$

-

$

2,210.5

Acquisition-related deferred revenue1

-

7.7

-

-

-

7.7

Net sales before special items

$

748.2

$

829.8

$

507.3

$

132.9

$

-

$

2,218.2

Operating profit (loss) - GAAP

74.1

68.9

87.8

17.7

(44.5

)

204.0

Acquisition-related deferred revenue1

-

7.7

-

-

-

7.7

Acquisition-related and integration charges

5.0

5.1

-

-

0.2

10.3

Repositioning related charges, net 2

7.7

13.5

4.7

0.6

-

26.5

Operating profit (loss) before special items

$

86.8

$

95.2

$

92.5

$

18.3

$

(44.3

)

$

248.5

Percentage of sales

11.6

%

11.5

%

18.2

%

13.8

%

11.2

%

For the nine months Fluid Payment & Aerospace & Engineered Totalended September 30, Handling Merchandising Electronics Materials Corporate Company2020 Technologies

Net sales - GAAP $ 748.2 $ 822.1 $ 507.3 $ 132.9 $ - $ 2,210.5

Acquisition-related - 7.7 - - - 7.7 deferred revenue^1

Net sales before $ 748.2 $ 829.8 $ 507.3 $ 132.9 $ - $ 2,218.2 special items



Operating profit 74.1 68.9 87.8 17.7 (44.5 ) 204.0 (loss) - GAAP

Acquisition-related - 7.7 - - - 7.7 deferred revenue^1

Acquisition-relatedand integration 5.0 5.1 - - 0.2 10.3 charges

Repositioningrelated charges, 7.7 13.5 4.7 0.6 - 26.5 net ^2

Operating profit(loss) before $ 86.8 $ 95.2 $ 92.5 $ 18.3 $ (44.3 ) $ 248.5 special items

Percentage of sales 11.6 % 11.5 % 18.2 % 13.8 % 11.2 %

For the nine months ended September 30, 2019

Fluid Handling

Payment & Merchandising Technologies

Aerospace & Electronics

Engineered Materials

Corporate

Total Company

Net sales

$

840.4

$

843.7

$

596.3

$

165.2

$

-

$

2,445.6

Operating profit (loss) - GAAP

106.8

124.8

141.4

22.8

(50.0

)

345.8

Acquisition-related and integration charges

-

1.6

-

-

2.1

3.7

Repositioning related charges, net

7.3

5.6

3.3

-

-

16.2

Operating profit (loss) before special items

$

114.1

$

132.0

$

144.7

$

22.8

$

(47.9

)

$

365.7

Percentage of sales

13.6

%

15.7

%

24.3

%

13.8

%

15.0

%

1 Acquisition-related revenue that would otherwise be recognized but for the purchase accounting treatment of acquisitions.

2 Repositioning related charges in 2020 primarily consist of COVID-19 related severance and, to a lesser extent, acquisition-related repositioning and facility consolidation.

Totals may not sum due to rounding

For the nine months Fluid Payment & Aerospace & Engineered Totalended September 30, Handling Merchandising Electronics Materials Corporate Company2019 Technologies

Net sales $ 840.4 $ 843.7 $ 596.3 $ 165.2 $ - $ 2,445.6



Operating profit 106.8 124.8 141.4 22.8 (50.0 ) 345.8 (loss) - GAAP

Acquisition-relatedand integration - 1.6 - - 2.1 3.7 charges

Repositioningrelated charges, 7.3 5.6 3.3 - - 16.2 net

Operating profit(loss) before $ 114.1 $ 132.0 $ 144.7 $ 22.8 $ (47.9 ) $ 365.7 special items

Percentage of sales 13.6 % 15.7 % 24.3 % 13.8 % 15.0 %

1 Acquisition-related revenue that would otherwise be recognized but for the purchase accounting treatment of acquisitions.

2 Repositioning related charges in 2020 primarily consist of COVID-19 related severance and, to a lesser extent, acquisition-related repositioning and facility consolidation.

Totals may not sum due to rounding

CRANE CO.

Guidance

(in millions, except per share data)

2020 Full Year Guidance

SALES GUIDANCE: Low High



Sales - GAAP basis $ 2,890 $ 2,940

Acquisition-related deferred revenue^1 10 10

Sales - non-GAAP basis $ 2,900 $ 2,950

2020 Full Year Guidance

EARNINGS PER SHARE GUIDANCE:

Low

High

Earnings per share - GAAP basis

$

3.10

$

3.35

Repositioning and other 2

0.40

0.40

M&A related 3

0.25

0.25

Earnings per share - non-GAAP basis

$

3.75

$

4.00

1 Acquisition-related revenue that would otherwise be recognized but for the purchase accounting treatment of acquisitions.

2 Repositioning related charges in 2020 primarily consist of COVID-19 related severance and, to a lesser extent, acquisition-related repositioning and facility consolidation.

3 Includes acquisition-related deferred revenue and acquisition-related and integration charges.

2020 Full Year Guidance

EARNINGS PER SHARE GUIDANCE: Low High



Earnings per share - GAAP basis $ 3.10 $ 3.35

Repositioning and other ^2 0.40 0.40

M&A related^ 3 0.25 0.25

Earnings per share - non-GAAP basis $ 3.75 $ 4.00

1 Acquisition-related revenue that would otherwise be recognized but for the purchase accounting treatment of acquisitions.

2 Repositioning related charges in 2020 primarily consist of COVID-19 related severance and, to a lesser extent, acquisition-related repositioning and facility consolidation.

3 Includes acquisition-related deferred revenue and acquisition-related and integration charges.

Three Months Ended Nine Months 2020 Full Year September 30, Ended September 30, Guidance

CASH FLOW ITEMS: 2020 2019 2020 2019 Low High

Cash provided byoperatingactivities $ 136.0 $ 129.6 $ 231.8 $ 200.0 $ 320.0 $ 350.0 beforeasbestos-relatedpayments

Asbestos-relatedpayments, net of (4.5 ) (11.1 ) (23.7 ) (29.0 ) (50.0 ) (50.0 )insurancerecoveries

Cash provided byoperating 131.5 118.5 208.1 171.0 270.0 300.0 activities

Less: Capital (7.1 ) (14.8 ) (20.6 ) (50.9 ) (40.0 ) (40.0 )expenditures

Free cash flow $ 124.4 $ 103.7 $ 187.5 $ 120.1 $ 230.0 $ 260.0

Totals may not sum due to rounding

The Company reports its financial results in accordance with U.S. generallyaccepted accounting principles (GAAP). Certain non-GAAP measures are providedin this presentation. Management believes that non-GAAP financial measureswhich exclude certain non-recurring items present additional useful comparisonsbetween current results and results in prior operating periods. Specifically,management believes that, when considered together with reported amounts, thesenon-GAAP measures are useful to investors and management in understandingongoing operations and by providing a clearer view of the underlying trends ofthe business. In addition, Free Cash Flow provides supplemental information toassist investors and management in analyzing the Company's ability to generateliquidity from its operating activities. The measure of Free Cash Flow does nottake into consideration certain other non-discretionary cash requirements suchas, for example, mandatory principal payments on the Company's long-term debt.Management uses non-GAAP financial measures in evaluating the Company's coreoperating results and financial performance. Non-GAAP financial measures, whichmay be inconsistent with similarly captioned measures presented by othercompanies, should be viewed as a supplement to, and not as a substitute for orsuperior to, the Company's reported results prepared in accordance with GAAP.Reconciliations of the Company's non-GAAP financial measures to the mostdirectly comparable GAAP results are included in the tables at the end of thispress release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201026005777/en/

CONTACT: Jason D. Feldman Vice President, Investor Relations 203-363-7329 www.craneco.com