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Crane's CEO Discusses Q1 2012 Results - Earnings Call Transcript

Excluding a $0.05 gain in the first quarter of 2011 related to the sale of a building and divestiture of a small product lines, EPS increased approximately 15%. Demand is robust and our late long cycle businesses with Aerospace and Fluid Handling and our backlog has increased accordingly.

Notwithstanding, a relatively minor patent litigation settlement and merchandising systems and some efficiencies in certain Fluid Handling European operations, we remain optimistic about our 2012 prospects and are on track to deliver results consistent with the full year guidance that we provided in February. As you know, we don’t provide quarterly guidance.

Our Aerospace Group is benefiting from increased OEM build rates and continued growth in passenger miles flown. Fluid Handling is positioned to benefit from its exposure to late cycle end markets, particularly in Energy and ChemPharma as evidenced by strong orders in growing backlog during the first quarter. As we indicated in February, our outlook is relatively stable for Electronics, Engineer Materials, and Merchandising Systems businesses.

We continue to make investments to drive profitable growth. Our initiative is to increase sales on marketing sophistication and formalize sales processes progressing well. We remain focused on international opportunities across the company, in part by leveraging our expanded Fluid Handling infrastructure. We have implemented a rigorous approach for new product development to facilitate successful product launches.

Importantly, we are focused on driving sales to our existing facilities, so that we can leverage our fixed cost base. In order to fund these initiatives, Crane has a productivity framework that is designed to make room before we invest. There has long been a cost conscious culture at Crane, and we are effectively transforming this into a productivity culture in order to drive cost reduction every year while improving operating efficiencies. This enables us to make investments we need to drive growth while at the same time allowing for margin expansion.

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