First Quarter 2024 Highlights
- Earnings per diluted share (EPS) of $1.12 and adjusted EPS of
$1.22.
- Year-over-year core sales growth of 5%, core orders growth of
11%, and core backlog growth of 11%.
- Raising full-year adjusted EPS guidance to a range of
$4.75-$5.05, from prior range of $4.55-$4.85.
- Announces agreement to acquire CryoWorks, Inc. for
approximately $61 million as a strategic bolt-on for our growing
Hydrogen business within the Process Flow Technologies
segment.
- Declaring second quarter 2024 regular dividend of $0.205 per
share.
Crane Company ("Crane," NYSE: CR) today announced its financial
results for the first quarter of 2024 and updated its full-year
outlook.
Max Mitchell, Crane's Chairman, President and Chief Executive
Officer, stated: “Crane is off to a great start in 2024, with
strong results reflecting continued differentiated execution and
accelerating results from growth initiatives. Core year-over-year
sales growth of 5% was accompanied by continued strong orders and
backlog growth, increasing our confidence in our outlook for the
full year."
Mr. Mitchell added: “We are also pleased to announce that we
signed an agreement to acquire CryoWorks, a leading supplier of
vacuum insulated pipe systems for hydrogen and cryogenic
applications which is highly synergistic with the ongoing organic
development of our CRYOFLO brand. Based in Jurupa Valley, CA,
CryoWorks has annual sales of approximately $28 million and
adjusted EBITDA of approximately $5 million. The transaction is
expected to close April 30, 2024."
Mr. Mitchell concluded: “With the first quarter of 2024 behind
us, we are extremely confident about our opportunities and
prospects in the quarters and years ahead. As expected and
previously communicated, there are still some persistent supply
chain challenges at Aerospace & Electronics, and ongoing
weakness in the European Chemical markets; however, our overall
outlook for the remainder of this year is improving, supported by
our strong first quarter performance, and robust growth in both
orders and backlog. Balancing all of these factors, we are raising
our full-year adjusted EPS guidance range by $0.20 to $4.75 to
$5.05."
First Quarter 2024 Results
First quarter 2024 GAAP EPS of $1.12 compared to $0.98 in the
first quarter of 2023. First quarter 2024 adjusted EPS of $1.22
compared to $1.26 in the first quarter of 2023.
First quarter sales increased 10%, with 5% core sales growth, 5%
contribution from acquisitions, and a slight benefit from favorable
foreign exchange. Operating profit from continuing operations of
$89 million increased 15% compared to last year, and adjusted
operating profit of $97 million increased 6% compared to last
year.
Summary of First Quarter 2024 Results from Continuing
Operations
First Quarter
Change
(unaudited, dollars in millions)
2024
2023
$
%
Net sales
$565
$514
$
52
10%
Core sales
24
5%
Acquisitions
26
5%
Foreign exchange
2
0%
Operating profit
$89
$78
$
12
15%
Adjusted operating profit*
$97
$91
$
6
6%
Operating profit margin
15.8
%
15.1
%
70bps
Adjusted operating profit margin*
17.1
%
17.7
%
(60bps)
*Please see the attached Non-GAAP
Financial Measures tables
Cash Flow, Financing Activities and Other Financial
Metrics
During the first quarter of 2024, cash used by operating
activities was $80 million, capital expenditures were $9 million,
and free cash flow (cash provided by operating activities less
capital spending) was negative $89 million, consistent with normal
seasonality. Adjusted free cash flow (free cash flow excluding
transaction related cash outflows) was negative $86 million.
(Please see the attached non-GAAP Financial Measures tables.)
As of March 31, 2024, the Company's cash balance was $219
million with total debt of $357 million.
Rich Maue, Crane's Executive Vice President and Chief Financial
Officer, added: "Our balance sheet remains very strong, and our low
leverage, along with our consistently strong cash flow generation,
continues to provide us with significant financial flexibility for
further capital deployment. By the end of our 13th month
post-separation, we will have completed three acquisitions that
strengthen our existing businesses, while creating value for our
shareholders, and we are confident in our ability to continue our
lengthy track record as a successful acquirer. As shown with these
first three transactions, we continue to deploy capital with strict
financial and strategic discipline."
First Quarter 2024 Segment Results
All comparisons detailed in this section refer to operating
results for the first quarter 2024 versus the first quarter
2023.
Aerospace & Electronics
First Quarter
Change
(unaudited, dollars in millions)
2024
2023
$
%
Net sales
$
226
$
180
$
46
25%
Core sales
37
20%
Acquisitions
9
5%
Operating profit
$
48
$
38
$
11
28%
Adjusted operating profit*
$
51
$
38
$
13
34%
Operating profit margin
21.4
%
20.9
%
50bps
Adjusted operating profit margin*
22.4
%
20.9
%
150bps
*Please see the attached Non-GAAP
Financial Measures tables
Sales of $226 million increased 25% compared to the prior year,
driven by 20% core sales growth and a 5% benefit from the
previously announced Vian acquisition. Operating profit margin of
21.4% increased 50 basis points from last year, primarily
reflecting the impact of higher volumes, productivity, and
favorable mix, partially offset by acquisition-related costs.
Adjusted operating profit margin of 22.4% increased 150 basis
points from last year, primarily reflecting the impact of higher
volumes, productivity, and favorable mix. Aerospace &
Electronics' order backlog was $792 million as of March 31, 2024
compared to $701 million as of December 31, 2023, and $645 million
as of March 31, 2023.
Process Flow Technologies
First Quarter
Change
(unaudited, dollars in millions)
2024
2023
$
%
Net sales
$
284
$
271
$
13
5%
Core sales
(5
)
(2%)
Foreign exchange
1
1%
Acquisitions
17
6%
Operating profit
$
57
$
63
$
(6
)
(10%)
Adjusted operating profit*
$
59
$
64
$
(4
)
(7%)
Operating profit margin
20.0
%
23.3
%
(330bps)
Adjusted operating profit margin*
20.8
%
23.4
%
(260bps)
*Please see the attached Non-GAAP
Financial Measures tables
Sales of $284 million increased 5%, driven by a 6% benefit from
the previously announced Baum acquisition and a 1% benefit from
favorable foreign exchange, partially offset by a 2% decline in
core sales. Operating profit margin declined 330 basis points to
20.0% primarily due to lower volumes, growth investments and
unfavorable mix, partially offset by productivity and favorable
pricing. Adjusted operating profit margin declined 260 basis points
to 20.8%. Process Flow Technologies order backlog was $393 million
as of March 31, 2024 compared to $379 million as of December 31,
2023, and $363 million as of March 31, 2023.
Engineered Materials
First Quarter
Change
(unaudited, dollars in millions)
2024
2023
$
%
Net sales
$
55
$
62
$
(7
)
(12%)
Operating profit
$
8
$
11
$
(3
)
(29%)
Operating profit margin
14.7
%
18.3
%
(360bps)
Sales of $55 million decreased 12% compared to the prior year.
Operating profit margin declined 360 basis points to 14.7% driven
primarily by lower volumes.
Raising 2024 Guidance
We are raising our full-year adjusted EPS guidance by $0.20 to a
range of $4.75 to $5.05, from the prior range of $4.55 to $4.85.
The revised guidance assumes that the CryoWorks acquisition is
completed on April 30, 2024.
Key assumptions for our revised guidance include:
- Total sales growth of approximately 10% (prior 8%) driven by
core sales growth of approximately 4% to 6% (prior 3% to 5%) and an
acquisition benefit of approximately 5% (prior 4%).
- Adjusted segment operating margin of ~20.5% (prior 20.1%).
- Corporate cost of $75 million (unchanged).
- Net non-operating expense of $23 million (prior $20
million).
- Adjusted tax rate of 23.5% (unchanged).
- Diluted shares of 58 million (unchanged).
Additional details of our outlook and guidance are included in
the presentation that accompanies this earnings release available
on our website at www.craneco.com in the "investors" section.
Declaring Second Quarter Dividend
Crane announced its regular quarterly dividend of $0.205 per
share for the second quarter of 2024. The dividend is payable on
June 12, 2024 to shareholders of record as of May 31, 2024.
Additional Information
Crane operated as part of Crane Holdings, Co. for the entire
first quarter of 2023 prior to completion of the separation
transaction on April 3, 2023. First quarter 2023 results, as
initially reported in May 2023, were derived from Crane Holdings,
Co.'s accounting records and were presented on a carve-out basis.
All of Crane's subsequent financial disclosures for pre-separation
periods show the financial results of Crane Holdings, Co. (now
renamed Crane NXT, Co.) with the Payment & Merchandising
Technologies segment presented as discontinued operations.
As a result of the change in accounting presentation required by
GAAP, first quarter 2023 GAAP EPS was reported as $1.08 when
initially reported on a carve-out basis, and in subsequent reports,
reported as $0.98 with the Payment & Merchandising Technologies
segment presented as discontinued operations. First quarter 2023
Adjusted EPS on a carve-out basis was reported as $1.25, and $1.26
with the Payment & Merchandising Technologies segment presented
as discontinued operations. Segment operating profit was the same
under both accounting methodologies.
Conference Call
Crane has scheduled a conference call to discuss the first
quarter financial results on Tuesday, April 23, 2024 at 10:00 A.M.
(Eastern). All interested parties may listen to a live webcast of
the call at 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.
About Crane Company
Crane Company has delivered innovation and technology-led
solutions for customers since its founding in 1855. Today, Crane is
a leading manufacturer of highly engineered components for
challenging, mission-critical applications focused on the
aerospace, defense, space and process industry end markets. The
Company is comprised of two strategic growth platforms, Aerospace
& Electronics and Process Flow Technologies, as well as the
Engineered Materials segment. Crane has approximately 7,000
employees in the Americas, Europe, the Middle East, Asia and
Australia. For more information, visit www.craneco.com.
Forward-Looking Statements Disclaimer
This press release contains forward-looking statements within
the meaning of the federal securities laws. Forward-looking
statements include all statements that are not historical
statements of fact and those regarding our intent, belief, or
expectations, including, but not limited to: benefits and synergies
of the separation transaction; strategic and competitive advantages
of Crane; future financing plans and opportunities; and business
strategies, prospects and projected operating and financial
results. We caution investors not to place undue reliance on any
such forward-looking statements.
These statements are based on management’s current expectations
and beliefs and are subject to a number of risks and uncertainties
that could lead to actual results differing materially from those
projected, forecasted or expected. Although we believe that the
assumptions underlying the forward-looking statements are
reasonable, we can give no assurance that our expectations will be
attained.
Risks and uncertainties that could cause actual results to
differ materially from our expectations include, but are not
limited to: changes in global economic conditions (including
inflationary pressures) and geopolitical risks, including
macroeconomic fluctuations that may harm our business, results of
operation and stock price; information systems and technology
networks failures and breaches in data security, theft of
personally identifiable and other information, non-compliance with
our contractual or other legal obligations regarding such
information; our ability to source components and raw materials
from suppliers, including disruptions and delays in our supply
chain; demand for our products, which is variable and subject to
factors beyond our control; governmental regulations and failure to
comply with those regulations; fluctuations in the prices of our
components and raw materials; loss of personnel or being able to
hire and retain additional personnel needed to sustain and grow our
business as planned; risks from environmental liabilities, costs,
litigation and violations that could adversely affect our financial
condition, results of operations, cash flows and reputation; risks
associated with conducting a substantial portion of our business
outside the U.S.; being unable to identify or complete
acquisitions, or to successfully integrate the businesses we
acquire, or complete dispositions; adverse impacts from intangible
asset impairment charges; potential product liability or warranty
claims; being unable to successfully develop and introduce new
products, which would limit our ability to grow and maintain our
competitive position and adversely affect our financial condition,
results of operations and cash flow; significant competition in our
markets; additional tax expenses or exposures that could affect our
financial condition, results of operations and cash flows;
inadequate or ineffective internal controls; specific risks
relating to our reportable segments, including Aerospace &
Electronics, Process Flow Technologies and Engineered Materials;
the ability and willingness of Crane Company and Crane NXT, Co. to
meet and/or perform their obligations under any contractual
arrangements that are entered into among the parties in connection
with the separation transaction and any of their obligations to
indemnify, defend and hold the other party harmless from and
against various claims, litigation and liabilities; and the ability
to achieve some or all the benefits that we expect to achieve from
the separation transaction.
Readers should carefully review Crane’s financial statements and
the notes thereto, as well as the section entitled “Risk Factors”
in Item 1A of Crane’s Annual Report on Form 10-K for the year ended
December 31, 2023 and the other documents Crane and its
subsidiaries file from time to time with the SEC. These filings
identify and address other important risks and uncertainties that
could cause actual events and results to differ materially from
those contained in the forward-looking statements. Crane assumes no
(and disclaims any) obligation to revise or update any
forward-looking statements.
We make no representations or warranties as to the accuracy of
any projections, statements or information contained in this press
release. It is understood and agreed that any such projections,
targets, statements and information are not to be viewed as facts
and are subject to significant business, financial, economic,
operating, competitive and other risks, uncertainties and
contingencies many of which are beyond our control, that no
assurance can be given that any particular financial projections
ranges, or targets will be realized, that actual results may differ
from projected results and that such differences may be material.
While all financial projections, estimates and targets are
necessarily speculative, we believe that the preparation of
prospective financial information involves increasingly higher
levels of uncertainty the further out the projection, estimate or
target extends from the date of preparation. The assumptions and
estimates underlying the projected, expected or target results are
inherently uncertain and are subject to a wide variety of
significant business, economic and competitive risks and
uncertainties that could cause actual results to differ materially
from those contained in the financial projections, estimates and
targets. The inclusion of financial projections, estimates and
targets in this press release should not be regarded as an
indication that we or our representatives, considered or consider
the financial projections, estimates and targets to be a reliable
prediction of future events.
(Financial Tables Follow)
CRANE COMPANY
Condensed Statements of
Operations Data
(unaudited, in millions, except
per share data)
Three Months Ended
March 31,
2024
2023
Net
sales:
Aerospace & Electronics
$
225.9
$
180.1
Process Flow Technologies
284.3
271.4
Engineered Materials
55.1
62.3
Total net sales
$
565.3
$
513.8
Operating
profit:
Aerospace & Electronics
$
48.3
$
37.7
Process Flow Technologies
56.9
63.3
Engineered Materials
8.1
11.4
Corporate
(23.9
)
(34.9
)
Total operating profit
$
89.4
$
77.5
Interest income
$
1.2
$
0.9
Interest expense
(7.2
)
(6.6
)
Miscellaneous expense, net
(1.3
)
(0.5
)
Income from continuing operations before
income taxes
82.1
71.3
Provision for income taxes
17.3
15.4
Net income from continuing operations
attributable to common shareholders
64.8
55.9
Income from discontinued operations, net
of tax
—
49.8
Net income attributable to common
shareholders
$
64.8
$
105.7
Earnings per diluted share from continuing
operations
$
1.12
$
0.98
Earnings per diluted share from
discontinued operations
—
0.86
Earnings per diluted share
$
1.12
$
1.84
Average diluted shares outstanding
58.1
57.3
Average basic shares outstanding
57.0
56.5
Supplemental
data:
Cost of sales
$
344.8
$
306.9
Selling, general & administrative
131.1
129.4
Transaction related expenses (a)
6.8
13.0
Repositioning related charges, net (a)
0.4
0.3
Depreciation and amortization (a)
12.9
9.2
Stock-based compensation expense (a)
6.6
5.6
(a) Amounts included within Cost of sales
and/or Selling, general & administrative costs.
CRANE COMPANY
Condensed Balance
Sheets
(unaudited, in millions)
March 31, 2024
December 31,
2023
Assets
Current assets
Cash and cash equivalents
$
219.4
$
329.6
Accounts receivable, net
356.3
306.4
Inventories, net
383.8
353.1
Other current assets
112.7
101.7
Total current assets
1,072.2
1,090.8
Property, plant and equipment, net
274.3
270.5
Other assets
280.3
224.6
Goodwill
791.6
747.7
Total assets
$
2,418.4
$
2,333.6
Liabilities and Equity
Current liabilities
Short-term borrowings
$
110.0
$
—
Accounts payable
156.0
179.1
Accrued liabilities
214.4
273.7
Income taxes
12.4
14.3
Total current liabilities
492.8
467.1
Long-term debt
246.8
248.5
Long-term deferred tax liability
48.6
37.1
Other liabilities
223.2
220.6
Total liabilities
1,011.4
973.3
Total equity
1,407.0
1,360.3
Total liabilities and equity
$
2,418.4
$
2,333.6
CRANE COMPANY
Condensed Statements of Cash
Flows
(unaudited, in millions)
Three Months Ended
March 31,
2024
2023
Operating activities:
Net income from continuing operations
attributable to common shareholders
$
64.8
$
55.9
Depreciation and amortization
12.9
9.2
Stock-based compensation expense
6.6
5.6
Defined benefit plans and postretirement
cost
0.9
2.9
Deferred income taxes
0.1
1.6
Cash used for operating working
capital
(162.4
)
(184.6
)
Defined benefit plans and postretirement
contributions
(0.6
)
(0.3
)
Environmental payments, net of
reimbursements
(1.4
)
(1.3
)
Other
(0.8
)
5.6
Total used for operating activities from
continuing operations
(79.9
)
(105.4
)
Investing activities:
Payment for acquisition - net of cash
acquired
(105.6
)
—
Capital expenditures
(9.1
)
(8.9
)
Other investing activities
0.2
0.2
Total used for investing activities from
continuing operations
(114.5
)
(8.7
)
Financing activities:
Dividends paid
(11.7
)
(26.6
)
Net (payments) proceeds related to
employee stock plans
(8.5
)
12.9
Debt issuance costs
—
(4.1
)
Proceeds from revolving facility, net
110.0
—
Proceeds from term facility of
discontinued operations
—
350.0
Repayment of term loans
(1.9
)
(400.0
)
Total provided by (used for) financing
activities from continuing and discontinued operations
87.9
(67.8
)
Discontinued operations:
Total provided by operating activities
—
34.6
Total used for investing activities
—
(4.1
)
Increase in cash and cash equivalents from
discontinued operations
—
30.5
Effect of exchange rate on cash and cash
equivalents
(3.7
)
4.0
Decrease in cash and cash equivalents
(110.2
)
(147.4
)
Cash and cash equivalents at beginning of
period (a)
329.6
657.6
Cash and cash equivalents at end of
period
219.4
510.2
Less: Cash and cash equivalents of
discontinued operations
—
218.0
Cash and cash equivalents of continuing
operations at end of period
$
219.4
$
292.2
(a) 2023 Includes cash and cash
equivalents of discontinued operations.
CRANE COMPANY
Order Backlog
(unaudited, in millions)
March 31,
December 31,
September 30,
June 30,
March 31,
2024
2023
2023
2023
2023
Aerospace & Electronics (a)
$
791.8
$
700.9
$
677.9
$
675.1
$
644.8
Process Flow Technologies(b)
393.3
379.0
352.9
352.9
363.0
Engineered Materials
12.8
11.3
14.6
14.5
16.8
Total backlog
$
1,197.9
$
1,091.2
$
1,045.4
$
1,042.5
$
1,024.6
(a) Includes $53.5 million of backlog as
of March 31, 2024, pertaining to the Vian acquisition.
(b) Includes $8.3 million and $11.5 million of backlog as of March
31, 2024 and December 31, 2023, respectively, pertaining to the
Baum acquisition.
CRANE COMPANY
Non-GAAP Financial
Measures
(unaudited, in millions, except
per share data)
Three Months Ended March
31,
2024
2023
% Change
$
Per Share
$
Per Share
(on $)
Net sales (GAAP)
$
565.3
$
513.8
10.0
%
Adjusted Operating Profit and Adjusted
Operating Profit Margin
Operating profit (GAAP)
$
89.4
$
77.5
15.4
%
Operating profit margin (GAAP)
15.8
%
15.1
%
Special items impacting operating
profit:
Transaction related expenses
6.8
13.0
Repositioning related charges, net
0.4
0.3
Adjusted operating profit (Non-GAAP)
$
96.6
$
90.8
6.4
%
Adjusted operating profit margin
(Non-GAAP)
17.1
%
17.7
%
Adjusted Net Income and Adjusted Net
Income per Share
Net income from continuing operations
attributable to common shareholders (GAAP)
$
64.8
$
1.12
$
55.9
0.98
15.9
%
Transaction related expenses
6.8
0.12
13.0
0.23
Repositioning related charges, net
0.4
—
0.3
—
Impact of pension non-service costs
0.6
0.01
1.4
0.03
Interest expense
—
—
5.9
0.10
Tax effect of the Non-GAAP adjustments
(1.5
)
(0.03
)
(4.3
)
(0.08
)
Adjusted net income (Non-GAAP)
$
71.1
$
1.22
$
72.2
$
1.26
(1.5
)%
Adjusted EBITDA and Adjusted EBITDA
Margin
Net income (GAAP)
$
64.8
$
55.9
15.9
%
Net income margin (GAAP)
11.5
%
10.9
%
Adjustments to net income:
Interest expense, net
6.0
5.7
Income tax expense
17.3
15.4
Depreciation
9.0
8.0
Amortization
3.9
1.2
Miscellaneous expense, net
1.3
0.5
Repositioning related charges, net
0.4
0.3
Transaction related expenses
6.8
13.0
Adjusted EBITDA (Non-GAAP)
$
109.5
$
100.0
9.5
%
Adjusted EBITDA Margin (Non-GAAP)
19.4
%
19.5
%
Totals may not sum due to rounding
CRANE COMPANY
Non-GAAP Financial Measures by
Segment
(unaudited, in millions)
Three Months Ended March 31,
2024
Aerospace &
Electronics
Process Flow
Technologies
Engineered Materials
Corporate
Total Company
Net sales
$
225.9
$
284.3
$
55.1
$
—
$
565.3
Operating profit (GAAP)
$
48.3
$
56.9
$
8.1
$
(23.9
)
$
89.4
Operating profit margin (GAAP)
21.4
%
20.0
%
14.7
%
15.8
%
Special items impacting operating
profit:
Transaction related expenses
2.4
1.9
—
2.5
6.8
Repositioning related charges, net
—
0.4
—
—
0.4
Adjusted operating profit (Non-GAAP)
$
50.7
$
59.2
$
8.1
$
(21.4
)
$
96.6
Adjusted operating profit margin
(Non-GAAP)
22.4
%
20.8
%
14.7
%
17.1
%
Three Months Ended March 31,
2023
Net sales
$
180.1
$
271.4
$
62.3
$
—
$
513.8
Operating profit (GAAP)
$
37.7
$
63.3
$
11.4
$
(34.9
)
$
77.5
Operating profit margin (GAAP)
20.9
%
23.3
%
18.3
%
15.1
%
Special items impacting operating
profit:
Transaction related expenses
—
—
—
13.0
13.0
Repositioning related charges, net
—
0.3
—
—
0.3
Adjusted operating profit (Non-GAAP)
$
37.7
$
63.6
$
11.4
$
(21.9
)
$
90.8
Adjusted operating profit margin
(Non-GAAP)
20.9
%
23.4
%
18.3
%
17.7
%
Totals may not sum due to rounding
CRANE COMPANY
Adjusted Free Cash
Flow
(unaudited, in millions, except
per share data)
Three Months Ended March
31,
Cash Flow Items
2024
2023
Cash used for operating activities from
continuing operations
$
(79.9
)
$
(105.4
)
Less: Capital expenditures
(9.1
)
(8.9
)
Free cash flow
$
(89.0
)
$
(114.3
)
Adjustments:
Transaction-related expenses
$
2.7
$
13.0
Adjusted free cash flow
$
(86.3
)
$
(101.3
)
Crane Company reports its financial results in accordance with
U.S. generally accepted accounting principles (“GAAP”). This press
release includes certain non-GAAP financial measures, including
adjusted operating profit, adjusted operating margin, adjusted EPS,
Free Cash Flow and Adjusted Free Cash Flow, that are not prepared
in accordance with GAAP. These non-GAAP measures are an addition,
and not a substitute for or superior to, measures of financial
performance prepared in accordance with GAAP and should not be
considered as an alternative to operating income, net income or any
other performance measures derived in accordance with GAAP. We
believe that these non-GAAP measures of financial results
(including on a forward-looking or projected basis) provide useful
supplemental information to investors about Crane Company. Our
management uses certain forward looking non-GAAP measures to
evaluate projected financial and operating results. However, there
are a number of limitations related to the use of these non-GAAP
measures and their nearest GAAP equivalents. For example, other
companies may calculate non-GAAP measures differently or may use
other measures to calculate their financial performance, and
therefore our non-GAAP measures may not be directly comparable to
similarly titled measures of other companies.
Reconciliations of certain forward-looking and projected
non-GAAP measures for post-separation Crane Company, including
Adjusted EPS, and Adjusted segment margin to the closest
corresponding GAAP measure are not available without unreasonable
efforts due to the high variability, complexity and low visibility
with respect to the charges excluded from these non-GAAP measures,
which could have a potentially significant impact on our future
GAAP results. For Crane Company, these forward looking and
projected non-GAAP measures are calculated as follows:
- "Adjusted operating margin" is calculated as adjusted operating
profit divided by sales. Adjusted operating profit is calculated as
operating profit before Special Items which include transaction
related expenses such as professional fees, and incremental costs
related to the separation; and repositioning related (gains)
charges. We believe that non-GAAP financial measures that exclude
these items provide investors with an alternative metric that can
assist in predicting future earnings and profitability that are
complementary to GAAP metrics.
- "Adjusted EPS" is calculated as adjusted net income divided by
diluted shares. Adjusted net income is calculated as net income
adjusted for Special Items which include transaction related
expenses such as professional fees, and incremental costs related
to the separation; repositioning related (gains) charges; and, the
impact of pension non-service costs. We believe that non-GAAP
financial measures adjusted for these items provide investors with
an alternative metric that can assist in predicting future earnings
and profitability that are complementary to GAAP metrics.
We believe that each of the following non-GAAP measures provides
useful information to investors regarding the Company’s financial
conditions and operations:
- "Adjusted Operating Profit" and "Adjusted Operating Margin" add
back to Operating Profit items which are outside of our core
performance, some of which may or may not be non-recurring, and
which we believe may complicate the interpretation of the Company’s
underlying earnings and operational performance. These items
include income and expense such as: transaction related expenses
and repositioning related (gains) charges. These items are not
incurred in all periods, the size of these items is difficult to
predict, and none of these items are indicative of the operations
of the underlying businesses. We believe that non-GAAP financial
measures that exclude these items provide investors with an
alternative metric that can assist in predicting future earnings
and profitability that are complementary to GAAP metrics.
- "Adjusted Net Income" and "Adjusted EPS" exclude items which
are outside of our core performance, some of which may or may not
be non-recurring, and which we believe may complicate the
presentation of the Company’s underlying earnings and operational
performance. These measures include income and expense items that
impacted Operating Profit such as: transaction related expenses and
repositioning related (gains) charges. Additionally, these non-GAAP
financial measures exclude income and expense items that impacted
Net Income and Earnings per Diluted Share such as the impact of
pension non-service costs. These items are not incurred in all
periods, the size of these items is difficult to predict, and none
of these items are indicative of the operations of the underlying
businesses. We believe that non-GAAP financial measures that
exclude these items provide investors with an alternative metric
that can assist in predicting future earnings and profitability
that are complementary to GAAP metrics.
- "Adjusted EBITDA" adds back to net income: net interest
expense, income tax expense, depreciation and amortization,
miscellaneous expense, net, and Special Items including transaction
related expenses. "Adjusted EBITDA Margin" is calculated as
adjusted EBITDA divided by net sales. We believe that adjusted
EBITDA and adjusted EBITDA margin provide investors with an
alternative metric that may be a meaningful indicator of our
performance and provides useful information to investors regarding
our financial conditions and results of operations that is
complementary to GAAP metrics.
- “Free Cash Flow” and “Adjusted Free Cash Flow” provide
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. Free Cash Flow is calculated as cash
provided by operating activities less capital spending. Adjusted
Free Cash Flow is calculated as Free Cash Flow adjusted for certain
cash items which we believe may complicate the interpretation of
the Company’s underlying free cash flow performance such as certain
transaction related cash flow items related to the separation
transaction. These items are not incurred in all periods, the size
of these items is difficult to predict, and none of these items are
indicative of the operations of the underlying businesses. We
believe that non-GAAP financial measures that exclude these items
provide investors with an alternative metric that can assist in
predicting future cash flows that are complementary to GAAP
metrics.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240422746368/en/
Jason D. Feldman Senior Vice President, Investor Relations,
Treasury & Tax 203-363-7329 www.craneco.com
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