Thursday, September 21, 2017 | Today's Vending Industry News
Crane Co. Reports 2016 Results; Q4 Sales In Payments And Vending Segment Increase; Asbestos Liability Estimate Extended To 2059

Posted On: 1/30/2017

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TAGS: Crane Co., Crane Co. 2016 fourth quarter Crane Co. 2016 full report, Crane Payment & Merchandising Technologies, Crane Payment Innovations, Crane Merchandising Systems, vending machine


Fourth Quarter and 2016 Highlights:

» Fourth-quarter, after-tax net asbestos provision of $125 million, or $2.13 per share; estimate of asbestos liability now covers pending and projected future claims through 2059.
» Full-year 2016 GAAP earnings per diluted share (EPS) of $2.07, compared with $3.89 in 2015. Excluding Special Items, EPS of $4.23 increased 3%, compared with $4.13 in 2015.
» Full-year sales of $2.75 billion increased slightly, compared with 2015, with core growth of 2%.
» Introducing 2017 EPS guidance of $4.30-$4.55, with expected sales of $2.7 billion, including core sales in a range of flat to +2%


STAMFORD, CT -- Crane Co., a diversified manufacturer of highly engineered industrial products, reported a fourth-quarter 2016 GAAP net loss of $1.09 a share, compared with earnings of $1.11 per diluted share in the fourth quarter of 2015. Fourth-quarter 2016 results include an after-tax net asbestos provision of $125 million, or $2.13 per share, and fourth-quarter 2015 results include net after-tax "special items" of $1 million, or $0.01 per share. Excluding special items, fourth-quarter 2016 earnings per diluted share were $1.02.

Fourth-quarter 2016 sales were $681 million, approximately flat, compared with the fourth quarter of 2015. Core sales increased $17 million, or 2.5%, mostly offset by a $16 million, or 2.4%, impact from unfavorable foreign exchange.

Full-year 2016 GAAP EPS was $2.07, compared with $3.89 in 2015. Special items in full-year results include an after-tax net asbestos provision of $125 million, or $2.11 per share, and a $3 million net after-tax legal settlement charge, or $0.05 per share. Special items in full-year 2015 results include $14 million in net after-tax charges, or $0.24 per share. Excluding special items in both years, 2016 EPS was $4.23, a 3% increase, compared with $4.13 in 2015.

Full-year 2016 sales of $2.75 billion increased slightly, compared with $2.74 billion in 2015. Core sales growth of $56 million, or 2%, were mostly offset by a $48 million, or 2%, impact from unfavorable foreign exchange.

Crane Co.'s four divisions are Fluid Handling, Payment & Merchandising Technologies, Engineered Materials and Aerospace & Electronics. The Payments & Merchandising segment is comprised of two companies, Crane Payment Innovations, which makes payment systems for unattended sales applications, and Crane Merchandising Systems, one of the world's largest vending machine manufacturers.

"Results exceeded our guidance and initial expectations entering 2016, and we were able to deliver adjusted EPS 3% above 2015 levels despite continued weakness in Fluid Handling end markets and a substantial impact from unfavorable foreign exchange," said Crane Co. president and chief executive Max Mitchell. "Adjusted operating margins increased 20 basis points compared to last year, driven primarily by very strong execution at Payment & Merchandising Technologies, and I am particularly proud that we delivered free cash flow of $267 million."

Crane said sales in the Payments & Merchandising segment increased $21 million, or 12%, driven by $28 million, or 16%, of core growth, partially offset by a $7 million, or -4%, impact from unfavorable foreign exchange. Operating margin expanded 310 basis points to 19.7%, driven primarily by integration synergies, the higher core sales and strong productivity.

Crane Co

"At Payment & Merchandising Technologies, we are seeing accelerating demand for productivity solutions, and we expect a third consecutive year of substantial growth and margin expansion in 2017," Mitchell said.

Crane Co. said it has extended the time horizon of its estimated asbestos liability through the generally accepted end point in 2059, reflecting stabilization in key trends such as indemnity and defense costs, and the number of claims filed against the company. As a result, the fourth quarter of 2016 included an after-tax net asbestos provision of $125 million, or $2.13 a share. The prior liability estimate, recorded as of Dec. 31, 2011, covered costs related to claims filed and projected to be filed through 2021.

Click here for Crane Co.'s full 2016 and fourth-quarter report and financial tables.