STAMFORD, CT -- Crane Co.'s vending machine and payment solutions division saw sales climb to $97.6 million in the second quarter, compared with $94 million a year ago. The 4% increase reflected higher sales of vending machines, and to some extent payment systems, which include coin mechanisms and banknote validators used on vending, amusement and gaming machines.
Operating profit of the Crane Merchandising Systems division increased $4.3 million. The manufacturer reported a profit margin of 9.3% compared with 7.6% in 2011's second quarter.
In April, Crane Merchandising Systems introduced a new vending machine platform that features integrated cashless payments, wireless and Ethernet network access, and contemporary user interfaces -- all "right out of the box." Snack, cold beverage and food venders in the new lineup are marketed under the "Media" brand. These machines are designed to deliver a more engaging, rewarding and reliable customer experience. | SEE STORY
Crane Merchandising Systems, with offices in St. Louis, MO, and manufacturing facilities in Williston, SC, is one of five organizations held by Stamford, CT-based Crane Co., a diversified manufacturer of highly engineered industrial products. Other units are involved in aerospace, electronics, controls, engineering materials and fluid handling.
In the second quarter, Crane Co. announced a "repositioning plan" for all its divisions. For its part, the vending division will consolidate manufacturing and engineering of certain payment products.
CMS recorded repositioning charges of $2.3 million in the quarter, including expenses associated with the anticipated sale of a property in St. Louis, MO, related to the division's previous plant consolidation in South Carolina. Pretax savings associated with these cost-cutting measures are expected to be $1 million annually, beginning in 2013.
Companywide, earnings per diluted share increased 26% to $1.07, compared with 85¢ in the 2011 second quarter. Crane Co.'s operating profit decreased 12% to $69.4 million, from $78.9 million a year earlier. Excluding repositioning charges, operating profit from continuing operations increased 7% to $84.1 million, and operating profit margin rose 12.8%, compared with 12.5% in the year-earlier quarter.
"The company executed well in the second quarter, with continued operating improvement year over year, as well as targeted actions to drive further improvements in 2013," said Crane Co. president and chief executive Eric C. Fast. "Reflecting our confidence in the company's future, we are increasing the quarterly dividend by 8%. We have narrowed our EPS guidance range and reduced the midpoint by $0.05, reflecting two small divestitures in the second quarter. Our repositioning actions directly address costs in our European fluid handling businesses, strengthening our confidence for 2013."
Crane Co. recorded pretax repositioning charges of $14.7 million in the second quarter of 2012, of which $11.4 million is related to its fluid handling business. The company expects to incur approximately $5 million in additional charges in the second half of 2012. Pretax savings associated with Crane's prepositioning actions are expected to be about $12 million annually, across all divisions, beginning in 2013.
Sales from continuing operations for 2012 are expected to increase 4% to 5%, to a range of $3.75-$3.85 a share, revised slightly downward from Crane Co.'s earlier guidance of $3.75-$3.95 per share.