STAMFORD, CT -- Crane Co.'s Merchandising Systems segment had sales of $84.8 million in the 2013 second quarter, compared with $97.6 million during the prior-year second quarter. Crane Merchandising Systems, which consists of two divisions, vending machine and unattended payment solutions, said declines in sales and operating profit were the result of lower capital spending by certain bottler customers and continued weakness in Europe. However, operating profit and margins increased in the payments division, reflecting higher sales and continued productivity gains. Crane said that "higher sales in Payment Solutions more than offset a decline in Vending Solutions."
Crane Merchandising Systems Second-Quarter Table:
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. Companywide, Crane reported $1.06 earnings per share (EPS) for the quarter, beating the Thomson Reuters consensus estimate of $1.04 by $0.02. The company had revenue of $648.7 million for the quarter, compared with $657.7 million in 2012's second quarter, a 1.4% decline.
Crane also declared a quarterly dividend, which is scheduled for Sept. 10. Stockholders of record on Friday, Aug. 30, will be paid a dividend of $0.30 per share. This represents a $1.20 dividend on an annualized basis and a yield of 1.87%.
Crane's second-quarter 2013 results included transaction-related costs of $7.3 million, or $0.13 a share, related to the pending acquisition of MEI Conlux Holdings, which was recently, and conditionally, cleared by the European Commission [see story]. Second-quarter 2012 results included a $0.31 per share gain associated with divestitures, partially offset by $0.20 per share of repositioning charges. Excluding special items in both years, second-quarter 2013 earnings per diluted share increased 10% to $1.06, compared with $0.96 in the second quarter of 2012. [See Crane's non-GAAP Financial Measures table.]
"We are pleased to report second-quarter EPS of $1.06 per share, excluding the MEI transaction costs," said Crane Co. chief executive Eric C. Fast. "On a slight decline in revenues, total company operating margins expanded 200 basis points to a record 14.8%, led by solid execution in our Fluid Handling segment and strong productivity across the company. Based on our expectation of record earnings this year and confidence in the future, we have increased our quarterly dividend by 7%. In connection with the pending acquisition of MEI, as previously reported, we are in negotiations with Bain Capital and Advantage Partners, the representatives of the owners of MEI, concerning the economic effects related to remedies required by the European Commission involving two Crane Payment Systems product lines."
Crane's 2013 EPS is now expected to be in a range of $4.10 to $4.25 a share, excluding special items, compared with its previous guidance range of $4.10 to $4.30 per share, reflecting lower-than-anticipated revenue growth. The 2013 guidance does not include potential impacts from the pending acquisition of MEI. Full-year 2013 free cash flow is expected to be between $190 million and $220 million.