Crane Co. Reports First Quarter Earnings

Full Year 2012 Guidance

As detailed at our February Investor Day Conference, sales for 2012 are expected to increase approximately 3-5% driven by a core sales increase of 5-6%, incremental sales from the WTA acquisition of less than 1%, partially offset by unfavorable foreign exchange of approximately 2%. 2012 earnings guidance is a range of $3.75 - $3.95 per diluted share, reflecting revenue and profit growth across all segments. The Company’s 2012 free cash flow (cash provided by operating activities less capital spending) guidance of $160 - $190 million includes the effect of asbestos related cash flows.

Additional Information

Please see the condensed financial statements and the Non-GAAP Financial Measures table attached to this press release for supporting details. Additional information with respect to the Company’s asbestos liability and related accounting provisions and cash requirements is set forth in the Current Report on Form 8-K filed with a copy of this press release.

Conference Call

Crane Co. has scheduled a conference call to discuss the first quarter financial results on Tuesday, April 24, 2012 at 10:00 A.M. (Eastern). All interested parties may listen to a live webcast of the call at http://www.craneco.com. An archived webcast will also be available to replay this conference call directly from the Company’s website.

Crane Co. is a diversified manufacturer of highly engineered industrial products. Founded in 1855, Crane provides products and solutions to customers in the aerospace, electronics, hydrocarbon processing, petrochemical, chemical, power generation, automated merchandising, transportation and other markets. The Company has five business segments: Aerospace & Electronics, Engineered Materials, Merchandising Systems, Fluid Handling, and Controls. Crane has approximately 11,000 employees in North America, South America, Europe, Asia and Australia. Crane Co. is traded on the New York Stock Exchange (NYSE:CR). For more information, visit www.craneco.com.

This press release may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements present management’s expectations, beliefs, plans and objectives regarding future financial performance, and assumptions or judgments concerning such performance. Any discussions contained in this press release, except to the extent that they contain historical facts, are forward-looking and accordingly involve estimates, assumptions, judgments and uncertainties. There are a number of factors that could cause actual results or outcomes to differ materially from those addressed in the forward-looking statements. Such factors are detailed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011 and subsequent reports filed with the Securities and Exchange Commission.

CRANE CO.
Income Statement Data
(in thousands, except per share data)
		Three Months Ended
		March 31,
			2012				2011
Net Sales:
Aerospace & Electronics		$	175,168			$	161,936
Engineered Materials			58,159				61,832
Merchandising Systems			87,675				94,878
Fluid Handling			301,886				264,142
Controls			34,991				28,232
Total Net Sales		$	657,879			$	611,020
Operating Profit (Loss):
Aerospace & Electronics		$	38,069			$	34,042
Engineered Materials			8,409				10,143
Merchandising Systems			4,713				4,673
Fluid Handling			39,640				35,453
Controls			4,701				3,111
Corporate			(15,972	)			(14,562	)
Total Operating Profit			79,560				72,860
Interest Income			395				290
Interest Expense			(6,711	)			(6,622	)
Miscellaneous- Net			(347	)			3,625		*
Income Before Income Taxes			72,897				70,153
Provision for Income Taxes			21,101				21,775
Net income before allocations to noncontrolling interests			51,796				48,378
Less: Noncontrolling interest in subsidiaries' gains (losses)			134				(89	)
Net income attributable to common shareholders		$	51,662			$	48,467
Share Data:
Earnings per Diluted Share		$	0.88			$	0.81
Average Diluted Shares Outstanding			58,880				59,552
Average Basic Shares Outstanding			57,889				58,330
Supplemental Data:
Cost of Sales		$	437,471			$	397,850
Selling, General & Administrative			140,848				140,310
Depreciation and Amortization **			14,674				15,774
Stock-Based Compensation Expense			4,007				3,503

* Primarily related to the sale of a building and the divestiture of a small product line in the three months ended March 31, 2011.

** Amount included within cost of sales and selling, general & administrative costs.

CRANE CO.
Condensed Balance Sheets
(in thousands)
			March 31,			December 31,
			2012			2011
ASSETS
Current Assets
Cash and Cash Equivalents		$	195,860		$	245,089
Accounts Receivable, net			404,418			349,250
Current Insurance Receivable - Asbestos			16,345			16,345
Inventories, net			368,495			360,689
Other Current Assets			64,092			60,859
Total Current Assets			1,049,210			1,032,232
Property, Plant and Equipment, net			284,289			284,146
Long-Term Insurance Receivable - Asbestos			204,929			208,952
Other Assets			485,268			497,377
Goodwill			826,717			820,824
Total Assets		$	2,850,413		$	2,843,531
LIABILITIES AND EQUITY
Current Liabilities
Notes Payable and Current Maturities of Long-Term Debt		$	794		$	1,112
Accounts Payable			184,319			194,158
Current Asbestos Liability			100,943			100,943
Accrued Liabilities			187,006			226,717
Income Taxes			14,745			10,165
Total Current Liabilities			487,807			533,095
Long-Term Debt			398,958			398,914
Long-Term Deferred Tax Liability			42,664			41,668
Long-Term Asbestos Liability			770,443			792,701
Other Liabilities			254,685			255,097
Total Equity			895,856			822,056
Total Liabilities and Equity		$	2,850,413		$	2,843,531

CRANE CO.
Condensed Statements of Cash Flows
(in thousands)
		Three Months Ended
		March 31,
		2012				2011
Operating Activities:
Net income attributable to common shareholders		$	51,662			$	48,467
Noncontrolling interest in subsidiaries' gains (losses)			134				(89	)
Net income before allocations to noncontrolling interests			51,796				48,378
Gain on divestiture			-				(4,258	)
Depreciation and amortization			14,674				15,774
Stock-based compensation expense			4,007				3,503
Defined benefit plans and postretirement expense			4,991				2,749
Deferred income taxes			8,544				6,893
Cash used for operating working capital			(103,503	)			(67,250	)
Defined benefit plans and postretirement contributions			(1,183	)			(4,779	)
Environmental payments, net of reimbursements			(2,579	)			(4,593	)
Other			(1,319	)			142
Subtotal			(24,572	)			(3,441	)
Asbestos related payments, net of insurance recoveries			(18,235	)			(12,725	)
Total used for operating activities			(42,807	)			(16,166	)
Investing Activities:
Capital expenditures			(7,165	)			(8,138	)
Proceeds from disposition of capital assets			172				4,553
Proceeds from divestiture			-				1,000
Total used for investing activities			(6,993	)			(2,585	)
Financing Activities:
Dividends paid			(15,090	)			(13,474	)
Reacquisition of shares on open market			-				(29,999	)
Stock options exercised - net of shares reacquired			8,426				12,552
Excess tax benefit from stock-based compensation			2,947				3,952
Change in short-term debt			(318	)			(76	)
Total used for financing activities			(4,035	)			(27,045	)
Effect of exchange rate on cash and cash equivalents			4,606				6,017
Decrease in cash and cash equivalents			(49,229	)			(39,779	)
Cash and cash equivalents at beginning of period			245,089				272,941
Cash and cash equivalents at end of period		$	195,860			$	233,162

CRANE CO.
Order Backlog
(in thousands)
		March 31,			December 31,			September 30,			June 30,			March 31,
		2012			2011			2011			2011			2011
Aerospace & Electronics		$	437,822		$	410,794		$	409,284		$	431,799		$	454,559
Engineered Materials			11,129			11,110			9,879			13,087			13,826
Merchandising Systems			30,033			15,212			20,929			26,898			25,008
Fluid Handling			337,538	*		313,715	*		328,757	*		323,045			305,255
Controls			29,770			27,120			32,145			30,323			24,015
Total Backlog		$	846,292		$	777,951		$	800,994		$	825,152		$	822,663

* Includes Order Backlog of $7.5 million at March 31, 2012, $7.1 million at December 31, 2011 and $5.4 million at September 30, 2011 pertaining to the 2011 acquisition of WTA.

CRANE CO.
Non-GAAP Financial Measures
(in thousands)
		Three Months Ended
		March 31,
		2012				2011
CASH FLOW ITEMS
Cash Used for Operating Activities
before Asbestos - Related Payments		$	(24,572	)		$	(3,441	)
Asbestos Related Payments, Net of Insurance Recoveries			(18,235	)			(12,725	)
Cash Used for Operating Activities			(42,807	)			(16,166	)
Less: Capital Expenditures			(7,165	)			(8,138	)
Free Cash Flow		$	(49,972	)		$	(24,304	)

Certain non-GAAP measures have been provided to facilitate comparison with the prior year.

The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that non-GAAP financial measures which exclude certain non-recurring items present additional useful comparisons between current results and results in prior operating periods, providing investors with a clearer view of the underlying trends of the business. Management also uses these non-GAAP financial measures in making financial, operating, planning and compensation decisions and in evaluating the Company's performance.

In addition, Free Cash Flow provides supplemental information to assist management and investors in analyzing the Company’s ability to generate liquidity from its operating activities. The measure of Free Cash Flow does not take into consideration certain other non-discretionary cash requirements such as, for example, mandatory principle payments on the Company's long-term debt. Non-GAAP financial measures, which may be inconsistent with similarly captioned measures presented by other companies, should be viewed in addition to, and not as a substitute for, the Company’s reported results prepared in accordance with GAAP.

Non-GAAP financial measures, which may be inconsistent with similarly captioned measures presented by other companies, should be viewed in the context of the definitions of the elements of such measures we provide and in addition to, and not as a substitute for, the Company’s reported results prepared in accordance with GAAP.

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