STAMFORD, CT -- Crane Co. reported fourth-quarter 2009 net income of $47.7 million, or 81¢ per diluted share, compared with a fourth-quarter 2008 net loss of $8.3 million, or 14¢ per share.
Fourth-quarter 2009 sales of $545 million decreased $44.3 million, or 8%, compared with the fourth quarter of 2008. This resulted from a core sales decline of $95 million (16%), partially offset by favorable foreign currency translation of $16.6 million (3%), an increase in sales from acquired businesses of $15.2 million (2%) and the impact of $18.9 million (3%) of sales related to a one-time settlement with Boeing.
In Merchandising Systems, sales of $71.7 million decreased $6.5 million, or 8%, reflecting continued difficult market conditions, especially in Payment Solutions. Operating profit increased to $4.6 million from a loss of $10.3 million as the favorable impact of a legal settlement, and cost reductions taken throughout the year, offset the "deleverage" on lower sales. The previously announced consolidation of the company's vending machine production from St. Louis, MO, to its Williston, SC, facility was completed in December.
For the full year, total sales in 2009 were $2.2 billion, a decline of 16% from $2.6 billion in 2008. Full-year 2009 core business sales decreased $454.1 million (18%), and unfavorable foreign currency translation of $87.8 million (3%) was partially offset by an increase in sales from acquired businesses of $115 million (4%) and the impact of $18.9 million (1%) of sales related to the Boeing settlement.
Net income for the full year 2009 was $133.9 million, or $2.28 per diluted share, compared with net income of $135.2 million, or $2.24 per share, in 2008.
Cash provided by operating activities was strong in the fourth quarter of 2009 and totaled $63.3 million, compared with $60.9 million in the fourth quarter of 2008. Free cashflow (cash provided by operating activities less capital spending) for the fourth quarter of 2009 was $56.2 million, compared with $49.5 million in the prior year. For the full year 2009, cash provided by operating activities was $189 million, compared with $191.4 million in 2008. Free cashflow for the full year 2009 was $160.7 million, compared with $146.3 million in the prior year.
In 2009, Crane said it achieved cost savings of $175 million, or 8% of sales, through cost reductions that included reducing its workforce by 2,300 employees (approximately 20%) since 2007 yearend.
In December, Crane announced it had signed a definitive agreement to acquire Merrimac Industries Inc., a leader in the design and manufacture of RF Microwave signal processing components, subsystem assemblies and micro-multifunction modules for the worldwide defense, satellite communications, commercial Wireless and homeland security markets. Under the terms of the agreement, Crane commenced a tender offer on Jan. 5, 2010, to acquire all of the outstanding shares of common stock of Merrimac.
Crane said it expects sales for 2010 to be relatively flat compared with 2009, at approximately $2.2 billion. Core sales in Merchandising Systems and Fluid Handling are projected to be flat, and a sales decline in Aerospace is expected to be offset by modest sales increases in the Electronics, Engineered Materials and Controls segments. The company’s 2010 earnings guidance is $2.15-$2.35 per diluted share.
Founded in 1855, Crane provides products and solutions to customers in aerospace, electronics, hydrocarbon processing, petrochemical, chemical, power generation, automated merchandising and transportation markets, among others.
Headquartered in St. Louis, Crane Merchandising Systems is composed of two solution-providing segments that enable seamless integration of equipment, vending management software and payment systems. Crane Vending Solutions, whose brands include National Vendors, Dixie-Narco, Automatic Products, GPL and Stentorfield, is a leading machine manufacturer. Crane's Streamware business unit, which develops and markets management software, is part of the vending segment.
Crane Payment Solutions is an alliance of Crane-owned companies CashCode, National Rejectors Inc. GmbH (NRI) and Telequip Corp. These businesses offer a wide range of innovative, reliable currency systems; all three are key suppliers to markets including global vending, gaming, retail and transportation.