Crane Co. Reports 2016 Results, Provides 2017 Guidance
STAMFORD, Conn.--(BUSINESS WIRE)-- Crane Co. (NYSE:CR), a diversified manufacturer of highly engineered industrial products, reported a fourth quarter 2016 GAAP net loss of $1.09 per share, compared to 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. (Please see the attached Non-GAAP Financial Measures tables.)
Fourth quarter 2016 sales were $681 million, approximately flat compared to 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 Results
Full year 2016 GAAP EPS was $2.07 compared to $3.89 in 2015. Special Items in full year 2016 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 to $4.13 in 2015. (Please see the attached NonGAAP Financial Measures tables.)
Full year 2016 sales of $2.75 billion increased slightly compared to $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.
Max Mitchell, Crane Co. President and Chief Executive Officer, stated: "We were pleased with our full year performance. 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. 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."
Mr. Mitchell continued, "We are introducing 2017 EPS guidance in a range of $4.30-$4.55, with core sales flat to up 2%, and free cash flow of $220-$250 million. We remain excited about our future prospects, both for 2017 and beyond, across our global growth platforms. 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. At Aerospace & Electronics, we have challenging top line comparisons following the completion of the Space Fence program; however, we have higher content on the newer, high growth aerospace programs launching over the next few years, along with declining R&D expense as major development programs are winding down. Fluid Handling order rates are stabilizing, and this business is well positioned for an eventual recovery. Lastly, Engineered Materials is positioned for another year of strong margins with continued underlying strength in its primary end markets." (Please see the attached Non-GAAP Financial Measures tables.)
Cash Flow and Other Financial Metrics
Cash provided by operating activities for the fourth quarter of 2016 was $150 million, compared to $114 million in the fourth quarter of 2015. Cash provided by operating activities for the full year 2016 was $318 million, compared to $229 million in 2015. Free cash flow (cash provided by operating activities less capital spending) was $267 million in 2016, compared to $190 million in 2015. The Company's cash position was $510 million at December 31, 2016, compared to $364 million at December 31, 2015. Total debt was $745 million at December 31, 2016, compared to $794 million at December 31, 2015.