Business Wire | Jul 27, 2020 05:01PM EDT

Crane Co. Reports Second Quarter 2020 Results

Jul. 27, 2020

STAMFORD, Conn.--(BUSINESS WIRE)--Jul. 27, 2020--Crane Co. (NYSE: CR), a diversified manufacturer of highly engineered industrial products, reported second quarter 2020 GAAP earnings per diluted share (EPS) of $0.25, compared to $1.50 in the second quarter of 2019. Excluding Special Items, second quarter 2020 EPS was $0.64, compared to $1.58 in the second quarter of 2019. (Please see the attached Non-GAAP Financial Measures tables for a detailed reconciliation of reported results to adjusted measures.)

Second quarter 2020 sales were $678 million, a decline of 20% compared to the second quarter of 2019. The sales decline was comprised of a $203 million, or 24%, decline in core sales and $8 million, or 1%, of unfavorable foreign exchange, partially offset by a $47 million, or 6%, benefit from acquisitions. We believe that the core sales decline was attributable to COVID-19 related macroeconomic factors.

Second quarter 2020 operating profit was $31 million compared to $123 million in the second quarter of 2019. Operating profit margin was 4.5% compared to 14.6% in the second quarter of 2019. Excluding Special Items, second quarter 2020 operating profit was $61 million compared to $132 million in the second quarter of 2019. Excluding Special Items, operating profit margin was 8.9% compared to 15.6% in the second 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 was, and is, extremely high, we did our best to provide meaningful guidance when we released last quarter's results. Our teams executed extremely well in a challenging environment, and second quarter results modestly exceeded our expectations largely due to certain timing related items. We have narrowed our guidance range to reflect that we are now more than halfway through the year, and incorporating our best thinking on the impact of pandemic-related government mandated openings and closings, business restrictions, and demand challenges. I 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 second quarter of 2020 was $112 million compared to $153 million in the second quarter of 2019. Capital expenditures in the second quarter of 2020 were $6 million compared to $16 million in the second quarter of 2019. Second quarter 2020 free cash flow (cash provided by operating activities less capital spending) was $106 million compared to $137 million in the second quarter of 2019.

The Company's cash position was $592 million at June 30, 2020, compared to $394 million at December 31, 2019. Total debt was $1,428 million at June 30, 2020, compared to $991 million at December 31, 2019. As of June 30, 2020, liquidity of approximately $900 million was comprised of $592 million in cash and $308 million available under our revolving credit facility.

Second Quarter 2020 Segment Results

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

Fluid Handling

Second Quarter Change

(dollars in millions) 2020 2019

Sales $ 239 $ 291 $ (51 ) (18 %)



Operating Profit $ 20 $ 37 $ (17 ) (46 %)

Operating Profit, before Special Items* $ 27 $ 40 $ (13 ) (33 %)



Profit Margin 8.4 % 12.8 %

Profit Margin, before Special Items* 11.2 % 13.7 %



*Please see the attached Non-GAAP Financial Measures tables

Sales of $239 million decreased $51 million, or 18%, driven by a $62 million, or 21%, decline in core sales and a $5 million, or 2%, impact from unfavorable foreign exchange, partially offset by a $15 million, or 5%, benefit from an acquisition. Operating profit margin declined to 8.4%, compared to 12.8% last year, primarily reflecting lower volumes, partially offset by productivity. Excluding Special Items, operating margin declined to 11.2%, compared to 13.7% last year. Fluid Handling order backlog was $299 million at June 30, 2020, compared to $267 million at December 31, 2019, and compared to $275 million at June 30, 2019.

Payment & Merchandising Technologies

Second Quarter Change

(dollars in millions) 2020 2019

Sales $ 248 $ 291 $ (43 ) (15 %)

Sales, including acquisition-related $ 250 $ 291 $ (41 ) (14 %)deferred revenue*



Operating Profit $ 2 $ 47 $ (45 ) (96 %)

Operating Profit, before Special Items* $ 20 $ 49 $ (29 ) (59 %)



Profit Margin 0.8 % 16.0 %

Profit Margin, before Special Items* 8.1 % 16.9 %



*Please see the attached Non-GAAP Financial Measures tables

Sales of $248 million decreased $43 million, or 15%, driven by a $72 million, or 25%, decline in core sales and a $3 million, or 1%, impact from unfavorable foreign exchange, partially offset by a $32 million, or 11%, benefit from an acquisition. Including $2.6 million of acquisition-related deferred revenue, sales in the second quarter of 2020 were $250 million. Operating profit margin declined to 0.8%, from 16.0% last year, primarily reflecting lower core volumes, and to a lesser extent unfavorable mix, partially offset by strong productivity. Excluding Special Items, operating profit margin declined to 8.1%, from 16.9% last year.

Aerospace & Electronics

Second Quarter Change

(dollars in millions) 2020 2019

Sales $ 157 $ 205 $ (47 ) (23 %)



Operating Profit $ 20 $ 49 $ (30 ) (61 %)

Operating Profit, before Special Items* $ 24 $ 51 $ (27 ) (53 %)



Profit Margin 12.4 % 24.2 %

Profit Margin, before Special Items* 15.4 % 25.0 %



*Please see the attached Non-GAAP Financial Measures tables

Sales of $157 million decreased $47 million, or 23%, driven by lower core sales. Operating profit margin declined to 12.4%, from 24.2% last year, primarily reflecting lower core volumes, partially offset by strong productivity. Excluding Special Items, operating profit margin declined to 15.4%, from 25.0% last year. Aerospace & Electronics' order backlog was $506 million at June 30, 2020, compared to a record $567 million at December 31, 2019, and compared to $503 million at June 30, 2019.

Engineered Materials

Second Quarter Change

(dollars in millions) 2020 2019

Sales $ 34 $ 56 $ (22 ) (40 %)



Operating Profit $ 2 $ 8 $ (6 ) (76 %)

Operating Profit, before Special Items* $ 2 $ 8 $ (5 ) (68 %)



Profit Margin 5.4 % 13.5 %

Profit Margin, before Special Items* 7.1 % 13.5 %



*Please see the attached Non-GAAP Financial Measures tables

Sales decreased $22 million, or 40%, driven primarily by lower sales to Recreational Vehicle customers. Operating margin declined to 5.4%, from 13.5% last year, primarily reflecting lower volumes. Excluding Special Items, operating profit margin declined to 7.1%, from 13.5% last year.

Updating Full Year Outlook

The company's current and best estimate of full-year 2020 GAAP EPS is now $2.65-$3.45, compared to the prior range of $2.35-$3.60. Excluding Special Items, the company's current and best estimate of full-year 2020 EPS is now $3.30-$4.10, compared to the prior range of $3.00-$4.25. We now expect a full-year 2020 core sales decline of approximately 17% to 21%, and we continue to expect full-year 2020 free cash flow (cash provided by operating activities less capital spending) in a range of $200-$250 million. (Please see the attached non-GAAP Financial Measures tables.)

We note that uncertainty regarding the potential impact of the COVID-19 pandemic on demand and operations continues to pose 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 second quarter financial results on Tuesday, July 28, 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 that could cause actual results or outcomes to differ materially from those addressed in these forward-looking statements. Such factors include, among others: uncertainties regarding the extent and duration of the impact of COVID-19 on many aspects of our business; 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. Such reports are available on the Securities Exchange Commission's website (www.sec.gov). Crane Co. does not undertake to update any forward-looking statements.

(Financial Tables Follow)

CRANE CO.

Income Statement Data

(in millions, except per share data)

Three Months Ended Six Months Ended

June 30, June 30,

2020 2019 2020 2019

Net sales:

Fluid Handling $ 239.3 $ 290.6 $ 495.9 $ 564.3

Payment & Merchandising 247.6 291.0 544.9 594.8 Technologies

Aerospace & Electronics 157.4 204.5 350.3 399.1

Engineered Materials 33.6 55.5 84.6 115.1

Total net sales $ 677.9 $ 841.6 $ 1,475.7 $ 1,673.3



Operating profit (loss):

Fluid Handling $ 20.2 $ 37.3 $ 48.2 $ 71.4

Payment & Merchandising 2.0 46.5 28.4 89.7 Technologies

Aerospace & Electronics 19.5 49.4 63.3 94.2

Engineered Materials 1.8 7.5 8.7 16.9

Corporate (13.0 ) (17.9 ) (29.5 ) (35.7 )

Total operating profit 30.5 122.8 119.1 236.5



Interest income 0.3 0.7 0.7 1.3

Interest expense (14.4 ) (11.4 ) (26.9 ) (23.3 )

Miscellaneous, net 2.5 6.4 6.3 8.4

Income before income 18.9 118.5 99.2 222.9 taxes

Provision for income 4.1 27.5 21.6 49.4 taxes

Net income beforeallocation to 14.8 91.0 77.6 173.5 noncontrollinginterests



Less: Noncontrollinginterest in - - - 0.1 subsidiaries' earnings



Net income attributable $ 14.8 $ 91.0 $ 77.6 $ 173.4 to common shareholders



Share data:

Earnings per diluted $ 0.25 $ 1.50 $ 1.31 $ 2.85 share



Average diluted shares 58.5 60.8 59.1 60.8outstanding

Average basic shares 58.0 59.9 58.5 59.8outstanding



Supplemental data:

Cost of sales $ 452.1 $ 535.0 $ 965.3 $ 1,063.0

Selling, general & 195.3 183.8 391.3 373.8 administrative

Acquisition-related and 2.3 2.4 7.5 3.5 integration charges ^1

Repositioning related 25.1 6.4 25.2 11.7 charges, net ^1, 2

Depreciation and 33.0 28.6 62.9 56.3 amortization ^1

Stock-based 4.7 5.7 10.5 11.2 compensation expense^ 1

1 Amounts included within cost of sales and 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)

June 30, December 31, 2020 2019

Assets

Current assets

Cash and cash equivalents $ 592.1 $ 393.9

Accounts receivable, net 444.8 555.1

Current insurance receivable - asbestos 14.1 14.1

Inventories, net 475.1 457.3

Other current assets 103.2 79.5

Total current assets 1,629.3 1,499.9



Property, plant and equipment, net 597.9 616.3

Long-term insurance receivable - asbestos 77.4 83.6

Other assets 747.9 751.5

Goodwill 1,577.8 1,472.4



Total assets $ 4,630.3 $ 4,423.7



Liabilities and equity

Current liabilities

Short-term borrowings $ 585.3 $ 149.4

Accounts payable 226.4 311.1

Current asbestos liability 65.0 65.0

Accrued liabilities 339.6 378.2

Income taxes 10.9 13.0

Total current liabilities 1,227.2 916.7



Long-term debt 842.5 842.0

Long-term deferred tax liability 51.1 55.8

Long-term asbestos liability 621.2 646.6

Other liabilities 464.7 486.3



Total equity 1,423.6 1,476.3



Total liabilities and equity $ 4,630.3 $ 4,423.7

Totals may not sum due to rounding

CRANE CO.

Condensed Statements of Cash Flows

(in millions)

Three Months Ended Six Months Ended June 30, June 30,

2020 2019 2020 2019

Operating activities:

Net income attributable to $ 14.8 $ 91.0 $ 77.6 $ 173.4 common shareholders

Noncontrolling interest in - - - 0.1 subsidiaries' earnings

Net income before allocations 14.8 91.0 77.6 173.5 to noncontrolling interests

Loss on deconsolidation of - - - 1.2 joint venture

Unrealized gain on marketable - (3.1 ) - (3.1 )securities

Depreciation and amortization 33.0 28.6 62.9 56.3

Stock-based compensation 4.7 5.7 10.5 11.2 expense

Defined benefit plans and (0.9 ) (2.0 ) (2.7 ) (4.0 )postretirement credit

Deferred income taxes 1.4 5.4 7.5 10.8

Cash provided by (used for) 69.6 32.0 (54.1 ) (171.4 )operating working capital

Defined benefit plans and (0.8 ) (0.8 ) (2.3 ) (5.1 )postretirement contributions

Environmental payments, net of (1.0 ) (2.4 ) (3.7 ) (4.0 )reimbursements

Other (1.2 ) 6.7 0.1 5.0

Subtotal 119.6 161.1 95.8 70.4

Asbestos related payments, net (7.5 ) (8.2 ) (19.2 ) (17.9 )of insurance recoveries

Total provided by operating 112.1 152.9 76.6 52.5 activities



Investing activities:

Payments for acquisitions, net (0.3 ) - (172.3 ) - of cash acquired

Proceeds from disposition of 0.3 0.9 2.7 0.9 capital assets

Capital expenditures (5.7 ) (16.3 ) (13.5 ) (36.1 )

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

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

Total used for investing (5.7 ) (24.2 ) (183.1 ) (44.2 )activities



Financing activities:

Dividends paid (24.9 ) (23.3 ) (50.4 ) (46.7 )

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

Stock options exercised, net of 0.5 1.6 0.6 1.2 shares reacquired

Debt issuance costs (1.2 ) - (1.2 ) -

Repayment of long-term debt - (1.4 ) - (2.8 )

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

Proceeds from issuance ofcommercial paper with 81.3 - 251.3 - maturities greater than 90 days

Repayments of commercial paperwith maturities greater than 90 (96.5 ) - (96.5 ) - days

Net repayments from issuance ofcommercial paper with (77.3 ) (55.5 ) (62.8 ) - maturities of 90 days or less

Proceeds from revolving credit 32.0 - 77.2 - facility

Repayments from revolving (77.2 ) - (77.2 ) - credit facility

Proceeds from term loan 343.9 - 343.9 -

Total provided by (used for) 180.6 (78.6 ) 314.9 (45.3 )financing activities



Effect of exchange rate on cash 2.3 0.1 (10.2 ) 0.6 and cash equivalents

Decrease in cash and cash 289.3 50.2 198.2 (36.4 )equivalents

Cash and cash equivalents at 302.8 256.8 393.9 343.4 beginning of period

Cash and cash equivalents at $ 592.1 $ 307.0 $ 592.1 $ 307.0 end of period

Totals may not sum due to rounding

CRANE CO.

Order Backlog

(in millions)

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

Fluid $ 298.6 ^ $ 293.4 ^ $ 267.0 $ 272.1 $ 274.9 Handling 1 1

Payment & ^ ^ ^Merchandising 285.5 2 326.3 2 311.4 2 291.8 286.8 Technologies

Aerospace & 505.7 547.5 567.4 564.3 502.8 Electronics

Engineered 10.1 10.8 9.4 10.1 11.5 Materials

Total backlog $ 1,099.9 $ 1,178.0 $ 1,155.2 $ 1,138.3 $ 1,076.0

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

2 Includes $46 million, $43 million and $44 million as of 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 per share data)

Three Months Ended Six Months Ended Percent Change June 30, June 30,

2020 2019 2020 2019 Three Six Months Months

INCOME ITEMS



Net sales - GAAP $677.9 $841.6 $1,475.7 $1,673.3 (19.5 ) (11.8 ) % %

Acquisition-related 2.6 - 5.1 - deferred revenue ^1

Net sales before $680.5 $841.6 $1,480.8 $1,673.3 (19.1 ) (11.5 )special items % %



Operating profit - 30.5 122.8 119.1 236.5 (75.2 ) (49.6 )GAAP % %

Percentage of sales 4.5 % 14.6 % 8.1 % 14.1 %



Special itemsimpacting operating profit:

Acquisition-related 2.6 - 5.1 - deferred revenue ^1

Acquisition-relatedand integration 2.3 2.4 7.5 3.5 charges

Repositioningrelated charges, 25.1 6.4 25.2 11.7 net ^2

Operating profit ) )before special $60.5 $131.6 $156.9 $251.7 (54.0 % (37.7 %items

Percentage of sales 8.9 % 15.6 % 10.6 % 15.0 %



Net incomeattributable to $14.8 $91.0 $77.6 $173.4 (83.7 ) (55.2 )common shareholders % %- GAAP

Per diluted share $0.25 $1.50 $1.31 $2.85 (83.1 ) (54.0 ) % %



Special itemsimpacting netincome attributable to commonshareholders:

Acquisition-relateddeferred revenue - 1.9 - 3.7 - net of tax ^1

Per diluted share $0.03 $0.06

Acquisition-relatedand integration 1.8 1.6 5.7 2.5 charges - net oftax

Per diluted share $0.03 $0.03 $0.10 $0.04

Repositioningrelated charges, 18.8 6.1 19.0 10.3 net - net of tax^ 2

Per diluted share $0.32 $0.10 $0.32 $0.17

Unrealized gain onmarketable - (2.5 ) - (2.5 ) securities - net oftax

Per diluted share $(0.04 ) $(0.04 )

Deconsolidation ofjoint venture - net - - - 0.8 of tax

Per diluted share $0.01

Net incomeattributable to ) )common shareholders 37.3 96.2 106.0 184.5 (61.2 % (42.5 %before specialitems

Per diluted share $ 0.64 $ 1.58 $ 1.79 $ 3.04 (59.7 ) (41.0 ) % %



Three Months Six Months Ended Ended June 30, June 30,

2020 2019 2020 2019

Special items impacting provision for income taxes:

Provision for income taxes - GAAP $4.1 $27.5 $21.6 $49.4

Tax effect of acquisition-related deferred 0.7 - 1.3 - revenue ^1

Tax effect of acquisition-related and 0.5 0.8 1.8 1.0integration charges

Tax effect of repositioning related charges^ 6.3 0.3 6.2 1.42

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

Tax effect of deconsolidation of joint - - - 0.4venture

Provision for income taxes before special $11.6 $27.9 $30.9 $51.5items

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

(in millions)

For the three Fluid Payment & Aerospace & Engineered Totalmonths ended June Handling Merchandising Electronics Materials Corporate Company30, 2020 Technologies

Net sales - GAAP $239.3 $247.6 $157.4 $33.6 $- $677.9

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

Net sales before $239.3 $250.2 $157.4 $33.6 $- $680.5special items



Operating profit 20.2 2.0 19.5 1.8 (13.0 ) 30.5(loss) - GAAP

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

Acquisition-relatedand integration 1.3 1.0 - - - 2.3charges

Repositioningrelated charges, 5.2 14.6 4.7 0.6 - 25.1net^2

Operating profit(loss) before $26.7 $20.2 $24.2 $2.4 $(13.0 ) $60.5special items

Percentage of sales 11.2 % 8.1 % 15.4 % 7.1 % 8.9 %



For the three Fluid Payment & Aerospace & Engineered Totalmonths ended June Handling Merchandising Electronics Materials Corporate Company30, 2019 Technologies

Net sales $290.6 $291.0 $204.5 $55.5 $- $841.6



Operating profit 37.3 46.5 49.4 7.5 (17.9 ) 122.8(loss) - GAAP

Acquisition-relatedand integration - 0.4 - - 2.0 2.4charges

Repositioningrelated charges, 2.5 2.2 1.7 - - 6.4net

Operating profit $(loss) before $39.8 $49.1 $51.1 $7.5 (15.9) $131.6special items

Percentage of sales 13.7 % 16.9 % 25.0 % 13.5 % 15.6 %



For the six months Fluid Payment & Aerospace & Engineered Totalended June 30, 2020 Handling Merchandising Electronics Materials Corporate Company Technologies

Net sales - GAAP $495.9 $544.9 $350.3 $84.6 $- $1,475.7

Acquisition-related - 5.1 - - - 5.1deferred revenue^1

Net sales before $495.9 $550.0 $350.3 $84.6 $- $1,480.8special items



Operating profit 48.2 28.4 63.3 8.7 (29.5 ) 119.1(loss) - GAAP

Acquisition-related - 5.1 - - - 5.1deferred revenue^1

Acquisition-relatedand integration 3.2 4.1 - - 0.2 7.5charges

Repositioningrelated charges, 6.6 13.3 4.7 0.6 - 25.2net^2

Operating profit(loss) before $58.0 $51.0 $68.0 $9.3 $(29.3 ) $156.9special items

Percentage of sales 11.7 % 9.4 % 19.4 % 11.1 % 10.6 %



For the six months Fluid Payment & Aerospace & Engineered Totalended June 30, 2019 Handling Merchandising Electronics Materials Corporate Company Technologies

Net sales $564.3 $594.8 $399.1 $115.1 $- $1,673.3



Operating profit 71.4 89.7 94.2 16.9 (35.7) 236.5(loss) - GAAP

Acquisition-relatedand integration - 1.5 - - 2.0 3.5charges

Repositioningrelated charges, 4.7 4.8 2.2 - - 11.7net

Operating profit $(loss) before $76.1 $96.0 $96.4 $16.9 (33.7) $251.7special items

Percentage of sales 13.5 % 16.1 % 24.2 % 14.7 % 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 $ 2,790 $ 2,915

Acquisition-related deferred revenue^1 10 10

Sales - non-GAAP basis $ 2,800 $ 2,925

2020 Full Year Q3 Guidance Guidance

EARNINGS PER SHARE GUIDANCE: Low High Low High



Earnings per share - GAAP basis $ 2.65 $ 3.45 $ 0.62 $ 0.77

Repositioning and other ^2 0.40 0.40 0.03 0.03

M&A related^ 3 0.25 0.25 0.05 0.05

Earnings per Share - non-GAAP $ 3.30 $ 4.10 $ 0.70 $ 0.85 basis

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

2 Repositioning related charges 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 Six Months 2020 Full Year Ended June 30, Ended June 30, Guidance

CASH FLOW ITEMS: 2020 2019 2020 2019 Low High

Cash provided byoperatingactivities $ 119.6 $ 161.1 $ 95.8 $ 70.4 $ 295.0 $ 345.0 beforeasbestos-relatedpayments

Asbestos-relatedpayments, net of (7.5 ) (8.2 ) (19.2 ) (17.9 ) (50.0 ) (50.0 )insurancerecoveries

Cash provided byoperating 112.1 152.9 76.6 52.5 245.0 295.0 activities

Less: Capital (5.7 ) (16.3 ) (13.5 ) (36.1 ) (45.0 ) (45.0 )expenditures

Free cash flow $ 106.4 $ 136.6 $ 63.1 $ 16.4 $ 200.0 $ 250.0

Totals may not sum due to rounding

Certain non-GAAP measures have been provided to facilitate comparison with theprior year.

The Company reports its financial results in accordance with U.S. generallyaccepted accounting principles (GAAP). However, management believes thatnon-GAAP financial measures which exclude certain non-recurring items presentadditional useful comparisons between current results and results in prioroperating periods, providing investors with a clearer view of the underlyingtrends of the business. Management also uses these non-GAAP financial measuresin making financial, operating, planning and compensation decisions and inevaluating the Company's performance.

In addition, Free Cash Flow provides supplemental information to assistmanagement and investors 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.Non-GAAP financial measures, which may be inconsistent with similarly captionedmeasures presented by other companies, should be viewed in addition to, and notas a substitute for, the Company's reported results prepared in accordance withGAAP.

View source version on businesswire.com: https://www.businesswire.com/news/home/20200727005741/en/

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