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Crane Co. Reports Record Third Quarter Results

Updated 2012 Guidance

Sales from continuing operations for 2012 are expected to increase approximately 4%, or at the low end of the prior sales guidance range of 4-5%. 2012 EPS is expected to be in the lower half of the previously communicated guidance range of $3.75 - $3.85, excluding Special Items. The EPS guidance includes $0.04 associated with the first half profits from discontinued operations, but excludes the gain from the sale of these businesses and repositioning costs. Full year 2012 free cash flow (cash provided by operating activities less capital spending) remains in a range of $150 - $180 million.

Cash Flow and Financial Position

Cash provided by operating activities in the third quarter of 2012 was $63.2 million, compared to $49.8 million in the third quarter of 2011. Cash provided by operating activities in the first nine months of 2012 was $79.3 million, compared to $65.0 million in the first nine months of 2011. Free cash flow for the nine months of 2012 was $59.3 million, compared to $37.3 million in the nine months of 2011. (Please see the Condensed Statement of Cash Flows and Non-GAAP table.)

The Company repurchased 499,267 shares of its common stock during the third quarter of 2012 at a cost of $20 million. The Company’s cash position was $281 million at September 30, 2012, as compared to $252 million at June 30, 2012 and $245 million at December 31, 2011.

Repositioning Actions

In the second quarter, the Company initiated repositioning actions primarily directed at improving the profitability of its European businesses. Following a pre-tax charge of $14.7 million recorded in the second quarter, the Company, as planned, incurred pre-tax repositioning costs of $1.4 million, or $0.9 million on an after-tax basis ($0.02 per share) in the third quarter of 2012. In addition to the amounts recorded thus far, the Company expects to incur additional pre-tax repositioning costs in the fourth quarter of 2012 of approximately $4 million, or $0.04 per share, primarily associated with equipment relocation and personnel costs in Fluid Handling. These repositioning actions are expected to be completed by year end. Pre-tax savings associated with all of these repositioning actions are expected to approximate $12 million annually for the Company beginning in 2013, of which $10 million relates to Fluid Handling.

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