Crane Company Reports Second Quarter 2024 Results and Raises Full Year EPS Guidance

Rhea-AI Summary

Crane Company (NYSE: CR) reported strong Q2 2024 results, raising its full-year adjusted EPS guidance. Key highlights include:

- EPS of $1.23, up 64%; adjusted EPS of $1.30, up 18%
- Sales of $581 million, up 14% with 9% core sales growth
- Full-year adjusted EPS guidance raised to $4.95-$5.15
- Strong performance in Aerospace & Electronics and Process Flow Technologies segments
- Solid order growth and strong backlog

The company's strategic investments in growth and commercial excellence are driving above-market core sales growth. Crane's strong balance sheet provides optionality for organic investments and strategic acquisitions.

Positive

• Q2 2024 EPS increased 64% to $1.23, with adjusted EPS up 18% to $1.30
• Sales grew 14% to $581 million, driven by 9% core sales growth
• Full-year adjusted EPS guidance raised and narrowed to $4.95-$5.15
• Aerospace & Electronics segment saw 22% sales growth and 360 bps increase in adjusted operating profit margin
• Process Flow Technologies segment experienced 13% sales growth and 50 bps expansion in adjusted operating profit margin
• Strong balance sheet with $229 million cash and low leverage, providing capital deployment optionality

Negative

• Engineered Materials segment sales decreased 8% with operating profit margin declining 320 bps to 13.9%

Insights

Financial Analyst

Crane Company's Q2 2024 results demonstrate robust performance and positive momentum. Adjusted EPS of $1.30 represents an 18% year-over-year increase, driven by strong core sales growth of 9%. The company's ability to achieve 40% core operating leverage is particularly impressive, indicating effective cost management and operational efficiency.

The raised full-year adjusted EPS guidance, now $4.95 to $5.15, signals management's confidence in sustained growth. This upward revision, coupled with the 14% increase in Q2 sales to $581 million, suggests Crane is successfully navigating market challenges and capitalizing on growth opportunities.

Notably, the Aerospace & Electronics segment showed exceptional performance with 22% sales growth and a significant margin expansion of 360 basis points. This could be attributed to the recovery in the aerospace sector and Crane's strategic positioning within it.

The company's strong balance sheet, with $229 million in cash and relatively low debt of $377 million, provides substantial flexibility for future investments and acquisitions. This financial strength, combined with the growing order backlog across segments, positions Crane well for continued growth and potential market share gains.

Market Research Analyst

Crane's Q2 results offer valuable insights into broader market trends. The 16% core sales growth in Aerospace & Electronics suggests a robust recovery in the aerospace sector, likely driven by increasing air travel and defense spending. This trend could benefit other companies in the aerospace supply chain.

The Process Flow Technologies segment's 7% core sales growth indicates steady demand in industrial markets. This could be a positive sign for the broader industrial sector, potentially signaling continued economic expansion despite inflationary pressures.

However, the 8% sales decline in the Engineered Materials segment raises questions about specific end markets, possibly pointing to challenges in construction or transportation industries.

Crane's success in driving above-market core sales growth through strategic investments and commercial excellence initiatives highlights the importance of innovation and customer-centric approaches in today's competitive landscape. Other industrial companies may need to adopt similar strategies to maintain market share.

The company's ability to raise prices while growing sales suggests strong pricing power, which could be indicative of a broader trend among well-positioned industrial firms in the current inflationary environment. This dynamic warrants close attention from investors across the industrial sector.

Second Quarter 2024 Highlights

• Earnings per diluted share (EPS) of $1.23, up 64% and adjusted EPS of $1.30, up 18%.
• Sales of $581 million, up 14% driven by 9% core sales growth.

Full Year Outlook

• Raising the midpoint of our full-year adjusted EPS guidance by $0.15 and narrowing the full year adjusted EPS outlook to a range of $4.95-$5.15, from prior range of $4.75-$5.05.

STAMFORD, Conn.--(BUSINESS WIRE)-- Crane Company ("Crane," NYSE: CR) today announced its financial results for the second quarter of 2024 and updated its full-year outlook.

Max Mitchell, Crane's Chairman, President and Chief Executive Officer, stated: “Our Crane team delivered 18% adjusted EPS growth in the quarter, driven by 9% core sales growth and solid core operating leverage of 40%. Our results in the quarter reflect benefits from our strategic investments in growth and commercial excellence, which continue to add value for our customers and drive above market core sales growth across both Aerospace & Electronics and Process Flow Technologies."

Mr. Mitchell concluded: “With a strong first half of 2024 behind us, we have incredible momentum across our key verticals. Our balance sheet provides significant optionality to invest in both organic opportunities and strategic acquisitions to further amplify growth. Coupled with the solid order growth and strong backlog, we are raising the midpoint of our full-year adjusted EPS guidance by $0.15 and narrowing our adjusted EPS guidance range to $4.95 to $5.15, from $4.75 to $5.05."

Second Quarter 2024 Results

Second quarter 2024 GAAP EPS of $1.23 compared to $0.75 in the second quarter of 2023. Second quarter 2024 adjusted EPS of $1.30 compared to $1.10 in the second quarter of 2023.

Second quarter sales increased 14%, with 9% core sales growth and a 6% contribution from acquisitions, partially offset by a slight headwind from unfavorable foreign exchange. Operating profit of $97 million increased 53% compared to last year, and adjusted operating profit of $103 million increased 22% compared to last year, in both cases primarily reflecting the impact from productivity, favorable volumes and net price, partially offset by unfavorable mix.

Summary of Second Quarter 2024 Results

		Second Quarter				Change
(unaudited, dollars in millions)		2024		2023		$				%
Net sales		$581		$510		$	72			14	%
Core sales							44			9	%
Acquisitions							29			6	%
Foreign exchange							(1	)		0	%
Operating profit		$97		$63		$	34			53	%
Adjusted operating profit*		$103		$84		$	19			22	%
Operating profit margin		16.6%		12.4%						420bps
Adjusted operating profit margin*		17.7%		16.5%						120bps
*Please see the attached Non-GAAP Financial Measures tables

Cash Flow, Financing Activities and Other Financial Metrics

During the second quarter of 2024, cash provided by operating activities was $62 million, capital expenditures were $7 million, and free cash flow (cash provided by operating activities less capital spending) was $55 million. Adjusted free cash flow (free cash flow excluding transaction related cash outflows) was $57 million. (Please see the attached non-GAAP Financial Measures tables.)

As of June 30, 2024, the Company's cash balance was $229 million with total debt of $377 million.

Rich Maue, Crane's Executive Vice President and Chief Financial Officer, added: "We ended the quarter with a strong balance sheet and leverage remains low, providing us with significant capital deployment optionality."

Second Quarter 2024 Segment Results

All comparisons detailed in this section refer to operating results for the second quarter 2024 versus the second quarter 2023.

Aerospace & Electronics

		Second Quarter								Change
(unaudited, dollars in millions)			2024				2023			$			%
Net sales		$	231			$	189			$	42		22	%
Core sales											31		16	%
Acquisitions											11		6	%
Operating profit		$	53			$	38			$	14		38	%
Adjusted operating profit*		$	55			$	38			$	17		43	%
Operating profit margin			22.8	%			20.2	%					260bps
Adjusted operating profit margin*			23.8	%			20.2	%					360bps
*Please see the attached Non-GAAP Financial Measures tables

Sales of $231 million increased 22% compared to the prior year, driven by 16% core sales growth and a 6% benefit from the previously announced Vian acquisition. Operating profit margin of 22.8% increased 260 basis points from last year, primarily reflecting the impact of higher volumes and productivity. Adjusted operating profit margin of 23.8% increased 360 basis points from last year. Aerospace & Electronics' order backlog was $815 million as of June 30, 2024 compared to $701 million as of December 31, 2023, and $675 million as of June 30, 2023.

Process Flow Technologies

		Second Quarter								Change
(unaudited, dollars in millions)			2024				2023			$				%
Net sales		$	298			$	263			$	35			13	%
Core sales											17			7	%
Foreign exchange											(1	)		0	%
Acquisitions											18			7	%
Operating profit		$	60			$	51			$	9			18	%
Adjusted operating profit*		$	61			$	53			$	8			16	%
Operating profit margin			20.0	%			19.2	%						80bps
Adjusted operating profit margin*			20.5	%			20.0	%						50bps
*Please see the attached Non-GAAP Financial Measures tables

Sales of $298 million increased 13% compared to the prior year, driven by 7% core sales growth and a 7% benefit from the previously announced Baum and CryoWorks acquisitions. Operating profit margin expanded 80 basis points to 20.0% primarily due to the impact from productivity, favorable net price, and higher volumes, partially offset by unfavorable mix. Adjusted operating profit margin expanded 50 basis points to 20.5% from last year. Process Flow Technologies order backlog was $400 million as of June 30, 2024 compared to $379 million as of December 31, 2023, and $353 million as of June 30, 2023.

Engineered Materials

		Second Quarter								Change
(unaudited, dollars in millions)			2024				2023			$				%
Net sales		$	53			$	57			$	(5	)		(8	%)
Operating profit		$	7			$	10			$	(3	)		(26	%)
Adjusted operating profit*		$	7			$	10			$	(2	)		(23	%)
Operating profit margin			13.9	%			17.1	%						(320bps)
Adjusted operating profit margin*			13.9	%			16.6	%						(270bps)
*Please see the attached Non-GAAP Financial Measures tables

Sales of $53 million decreased 8% compared to the prior year. Operating profit margin declined 320 basis points to 13.9%, and adjusted operating profit margin declined 270 basis points to 13.9%, primarily driven by lower volumes.

Updating 2024 Guidance

We are raising the midpoint of our full-year adjusted EPS guidance by $0.15 and narrowing the adjusted EPS outlook to a range of $4.95 to $5.15, from the prior range of $4.75 to $5.05.

Key assumptions for our revised guidance include:

• Total sales growth of approximately 11% (prior 10%) driven by core sales growth of approximately 5% to 7% (prior 4% to 6%) and an acquisition benefit of approximately 5% (unchanged).
• Adjusted segment operating margin of ~20.7% (prior 20.5%).
• Corporate cost of $80 million (prior $75 million).
• Net non-operating expense of $20 million (prior $23 million).
• Adjusted tax rate of 23.0% (prior 23.5%).
• Diluted shares of ~58 million (unchanged).

Additional details of our outlook and guidance are included in the presentation that accompanies this earnings release available on our website at www.craneco.com in the "investors" section.

Additional Information

References to changes in “core sales” or "core growth" in this report include the change in sales excluding the impact of foreign currency translation and acquisitions and divestitures from closing up to the first anniversary of such acquisitions or divestitures.

Crane operated as part of Crane Holdings, Co. for the entire first quarter of 2023 prior to completion of the separation transaction on April 3, 2023. First quarter 2023 results, as initially reported in May 2023, were derived from Crane Holdings, Co.'s accounting records and were presented on a carve-out basis. All of Crane's subsequent financial disclosures for pre-separation periods show the financial results of Crane Holdings, Co. (now renamed Crane NXT, Co.) with the Payment & Merchandising Technologies segment presented as discontinued operations.

As a result of the change in accounting presentation required by GAAP, first quarter 2023 GAAP EPS was reported as $1.08 when initially reported on a carve-out basis, and in subsequent reports, reported as $0.98 with the Payment & Merchandising Technologies segment presented as discontinued operations. First quarter 2023 Adjusted EPS on a carve-out basis was reported as $1.25, and $1.26 with the Payment & Merchandising Technologies segment presented as discontinued operations. Segment operating profit was the same under both accounting methodologies.

Conference Call

Crane has scheduled a conference call to discuss the second quarter financial results on Tuesday, July 30, 2024 at 10:00 A.M. (Eastern). All interested parties may listen to a live webcast of the call at www.craneco.com. An archived webcast will also be available to replay this conference call directly from the Company’s website under Investors, Events & Presentations. Slides that accompany the conference call will be available on the Company’s website.

About Crane Company

Crane Company has delivered innovation and technology-led solutions for customers since its founding in 1855. Today, Crane is a leading manufacturer of highly engineered components for challenging, mission-critical applications focused on the aerospace, defense, space and process industry end markets. The Company has two strategic growth platforms: Aerospace & Electronics and Process Flow Technologies. Crane has approximately 7,500 employees in the Americas, Europe, the Middle East, Asia and Australia. For more information, visit www.craneco.com.

Forward-Looking Statements Disclaimer

This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements include all statements that are not historical statements of fact and those regarding our intent, belief, or expectations, including, but not limited to: benefits and synergies of the separation transaction; strategic and competitive advantages of Crane; future financing plans and opportunities; and business strategies, prospects and projected operating and financial results. We caution investors not to place undue reliance on any such forward-looking statements.

These statements are based on management’s current expectations and beliefs and are subject to a number of risks and uncertainties that could lead to actual results differing materially from those projected, forecasted or expected. Although we believe that the assumptions underlying the forward-looking statements are reasonable, we can give no assurance that our expectations will be attained.

Risks and uncertainties that could cause actual results to differ materially from our expectations include, but are not limited to: changes in global economic conditions (including inflationary pressures) and geopolitical risks, including macroeconomic fluctuations that may harm our business, results of operation and stock price; information systems and technology networks failures and breaches in data security, theft of personally identifiable and other information, non-compliance with our contractual or other legal obligations regarding such information; our ability to source components and raw materials from suppliers, including disruptions and delays in our supply chain; demand for our products, which is variable and subject to factors beyond our control; governmental regulations and failure to comply with those regulations; fluctuations in the prices of our components and raw materials; loss of personnel or being able to hire and retain additional personnel needed to sustain and grow our business as planned; risks from environmental liabilities, costs, litigation and violations that could adversely affect our financial condition, results of operations, cash flows and reputation; risks associated with conducting a substantial portion of our business outside the U.S.; being unable to identify or complete acquisitions, or to successfully integrate the businesses we acquire, or complete dispositions; adverse impacts from intangible asset impairment charges; potential product liability or warranty claims; being unable to successfully develop and introduce new products, which would limit our ability to grow and maintain our competitive position and adversely affect our financial condition, results of operations and cash flow; significant competition in our markets; additional tax expenses or exposures that could affect our financial condition, results of operations and cash flows; inadequate or ineffective internal controls; specific risks relating to our reportable segments, including Aerospace & Electronics, Process Flow Technologies and Engineered Materials; the ability and willingness of Crane Company and Crane NXT, Co. to meet and/or perform their obligations under any contractual arrangements that are entered into among the parties in connection with the separation transaction and any of their obligations to indemnify, defend and hold the other party harmless from and against various claims, litigation and liabilities; and the ability to achieve some or all the benefits that we expect to achieve from the separation transaction.

Readers should carefully review Crane’s financial statements and the notes thereto, as well as the section entitled “Risk Factors” in Item 1A of Crane’s Annual Report on Form 10-K for the year ended December 31, 2023 and the other documents Crane and its subsidiaries file from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Crane assumes no (and disclaims any) obligation to revise or update any forward-looking statements.

We make no representations or warranties as to the accuracy of any projections, statements or information contained in this press release. It is understood and agreed that any such projections, targets, statements and information are not to be viewed as facts and are subject to significant business, financial, economic, operating, competitive and other risks, uncertainties and contingencies many of which are beyond our control, that no assurance can be given that any particular financial projections ranges, or targets will be realized, that actual results may differ from projected results and that such differences may be material. While all financial projections, estimates and targets are necessarily speculative, we believe that the preparation of prospective financial information involves increasingly higher levels of uncertainty the further out the projection, estimate or target extends from the date of preparation. The assumptions and estimates underlying the projected, expected or target results are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the financial projections, estimates and targets. The inclusion of financial projections, estimates and targets in this press release should not be regarded as an indication that we or our representatives, considered or consider the financial projections, estimates and targets to be a reliable prediction of future events.

(Financial Tables Follow)

Source: Crane Company

CRANE COMPANY Condensed Statements of Operations Data (unaudited, in millions, except per share data)
		Three Months Ended June 30,								Six Months Ended June 30,
			2024				2023				2024				2023
Net sales:
Aerospace & Electronics		$	230.9			$	189.2			$	456.8			$	369.3
Process Flow Technologies			297.7				263.2				582.0				534.6
Engineered Materials			52.6				57.2				107.7				119.5
Total net sales		$	581.2			$	509.6			$	1,146.5			$	1,023.4
Operating profit:
Aerospace & Electronics		$	52.7			$	38.3			$	101.0			$	75.9
Process Flow Technologies			59.5				50.6				116.4				113.9
Engineered Materials			7.3				9.8				15.4				21.2
Corporate			(22.9	)			(35.6	)			(46.8	)			(70.4	)
Total operating profit		$	96.6			$	63.1			$	186.0			$	140.6
Interest income		$	1.3			$	0.8			$	2.5			$	1.7
Interest expense			(7.4	)			(5.3	)			(14.6	)			(11.8	)
Miscellaneous income (expense), net			1.1				(1.3	)			(0.2	)			(1.9	)
Income from continuing operations before income taxes			91.6				57.3				173.7				128.6
Provision for income taxes			20.0				14.0				37.3				29.4
Net income from continuing operations attributable to common shareholders			71.6				43.3				136.4				99.2
Income from discontinued operations, net of tax			—				2.3				—				52.1
Net income attributable to common shareholders		$	71.6			$	45.6			$	136.4			$	151.3
Earnings per diluted share from continuing operations		$	1.23			$	0.75			$	2.34			$	1.73
Earnings per diluted share from discontinued operations			—				0.04				—				0.91
Earnings per diluted share		$	1.23			$	0.79			$	2.34			$	2.64
Average diluted shares outstanding			58.3				57.4				58.2				57.4
Average basic shares outstanding			57.2				56.7				57.1				56.6
Supplemental data:
Cost of sales		$	357.3			$	308.5			$	702.1			$	615.4
Selling, general & administrative			127.3				138.0				258.4				267.4
Transaction related expenses (a)			5.9				19.2				12.7				32.2
Repositioning related charges, net (a)			0.1				1.7				0.5				2.0
Depreciation and amortization (a)			13.8				9.8				26.7				19.0
Stock-based compensation expense (a)			6.9				8.4				13.5				14.0
(a) Amounts included within Cost of sales and/or Selling, general & administrative costs.

CRANE COMPANY Condensed Balance Sheets (unaudited, in millions)
		June 30, 2024			December 31, 2023
Assets
Current assets
Cash and cash equivalents		$	229.3		$	329.6
Accounts receivable, net			370.9			306.4
Inventories, net			389.6			353.1
Other current assets			119.4			101.7
Total current assets			1,109.2			1,090.8
Property, plant and equipment, net			273.6			270.5
Other assets			299.8			224.6
Goodwill			824.1			747.7
Total assets		$	2,506.7		$	2,333.6
Liabilities and Equity
Current liabilities
Short-term borrowings		$	130.0		$	—
Accounts payable			157.4			179.1
Accrued liabilities			229.3			273.7
Income taxes			3.9			14.3
Total current liabilities			520.6			467.1
Long-term debt			246.9			248.5
Long-term deferred tax liability			49.1			37.1
Other liabilities			214.4			220.6
Total liabilities			1,031.0			973.3
Total equity			1,475.7			1,360.3
Total liabilities and equity		$	2,506.7		$	2,333.6

CRANE COMPANY Condensed Statements of Cash Flows (unaudited, in millions)
		Three Months Ended June 30,								Six Months Ended June 30,
			2024				2023				2024				2023
Operating activities:
Net income attributable to common shareholders		$	71.6			$	45.6			$	136.4			$	151.3
Less: Income from discontinued operations, net of tax			—				2.3				—				52.1
Net income from continuing operations attributable to common shareholders			71.6				43.3				136.4				99.2
Depreciation and amortization			13.8				9.8				26.7				19.0
Stock-based compensation expense			6.9				8.4				13.5				14.0
Defined benefit plans and postretirement cost			1.0				1.9				1.9				4.8
Deferred income taxes			(0.1	)			(5.3	)			—				(3.7	)
Cash (used for) provided by operating working capital			(24.0	)			1.3				(186.4	)			(183.3	)
Defined benefit plans and postretirement contributions			(5.4	)			(5.4	)			(6.0	)			(5.7	)
Environmental payments, net of reimbursements			(1.4	)			(0.6	)			(2.8	)			(1.9	)
Other			(0.4	)			(1.0	)			(1.2	)			4.6
Total provided by (used for) operating activities from continuing operations			62.0				52.4				(17.9	)			(53.0	)
Investing activities:
Payment for acquisition - net of cash acquired			(60.7	)			—				(166.3	)			—
Capital expenditures			(7.4	)			(11.6	)			(16.5	)			(20.5	)
Other investing activities			5.5				(0.5	)			5.7				(0.3	)
Total used for investing activities from continuing operations			(62.6	)			(12.1	)			(177.1	)			(20.8	)
Financing activities:
Dividends paid			(11.7	)			(10.2	)			(23.4	)			(36.8	)
Net proceeds (payments) related to employee stock plans			3.4				0.8				(5.1	)			13.7
Debt issuance costs			—				(3.4	)			—				(7.5	)
Proceeds from long-term debt			50.0				300.0				190.0				300.0
Proceeds from term facility of discontinued operations			—				—				—				350.0
Repayments of long-term debt			(30.0	)			(36.9	)			(61.9	)			(436.9	)
Distribution of Crane NXT, Co.			—				(578.1	)			—				(578.1	)
Total provided by (used for) financing activities from continuing and discontinued operations			11.7				(327.8	)			99.6				(395.6	)
Discontinued operations:
Total provided by operating activities			—				—				—				34.6
Total used for investing activities			—				—				—				(4.1	)
Increase in cash and cash equivalents from discontinued operations			—				—				—				30.5
Effect of exchange rate on cash and cash equivalents			(1.2	)			(3.8	)			(4.9	)			0.2
Increase (decrease) in cash and cash equivalents			9.9				(291.3	)			(100.3	)			(438.7	)
Cash and cash equivalents at beginning of period (a)			219.4				510.2				329.6				657.6
Cash and cash equivalents at end of period		$	229.3			$	218.9			$	229.3			$	218.9
(a) 2023 Includes cash and cash equivalents of discontinued operations.

CRANE COMPANY Order Backlog (unaudited, in millions)
		June 30,			March 31,			December 31,			September 30,			June 30,
		2024			2024			2023			2023			2023
Aerospace & Electronics (a)		$	814.9		$	791.8		$	700.9		$	677.9		$	675.1
Process Flow Technologies(b) (c)			399.9			393.3			379.0			352.9			352.9
Engineered Materials			11.0			12.8			11.3			14.6			14.5
Total backlog		$	1,225.8		$	1,197.9		$	1,091.2		$	1,045.4		$	1,042.5

^(a) Includes $62.3 million and $53.5 million of backlog as of June 30, 2024 and March 31, 2024, respectively, pertaining to the Vian acquisition.

^(b) Includes $11.6 million of backlog as of June 30, 2024 pertaining to the CryoWorks acquisition.

^(c) Includes $6.4 million, $8.3 million and $11.5 million of backlog as of June 30, 2024, March 31, 2024 and December 31, 2023, respectively, pertaining to the Baum acquisition.

CRANE COMPANY Non-GAAP Financial Measures (unaudited, in millions, except per share data)
		Three Months Ended June 30,
		2024								2023								% Change
		$				Per Share				$				Per Share				(on $)
Net sales (GAAP)		$	581.2							$	509.6							14.1	%
Adjusted Operating Profit and Adjusted Operating Profit Margin
Operating profit (GAAP)		$	96.6							$	63.1							53.1	%
Operating profit margin (GAAP)			16.6	%							12.4	%
Special items impacting operating profit:
Transaction related expenses(a)(b)			5.9								19.2
Repositioning related charges, net			0.1								1.7
Adjusted operating profit (Non-GAAP)		$	102.6							$	84.0							22.1	%
Adjusted operating profit margin (Non-GAAP)			17.7	%							16.5	%
Adjusted Net Income and Adjusted Net Income per Share
Net income from continuing operations attributable to common shareholders (GAAP)		$	71.6			$	1.23			$	43.3			$	0.75			65.4	%
Transaction related expenses(a)(b)			5.3				0.09				19.2				0.33
Repositioning related charges, net			0.1				—				1.7				0.03
Impact of pension non-service costs			(0.3	)			—				1.5				0.03
Tax effect of the Non-GAAP adjustments			(1.2	)			(0.02	)			(2.3	)			(0.04	)
Adjusted net income (Non-GAAP)		$	75.5			$	1.30			$	63.4			$	1.10			19.1	%
Adjusted EBITDA and Adjusted EBITDA Margin
Net income (GAAP)		$	71.6							$	43.3							65.4	%
Net income margin (GAAP)			12.3	%							8.5	%
Adjustments to net income:
Interest expense, net			6.1								4.5
Income tax expense			20.0								14.0
Depreciation			9.5								8.0
Amortization			4.3								1.8
Miscellaneous (income) expense, net			(1.1	)							1.3
Repositioning related charges, net			0.1								1.7
Transaction related expenses(a)(b)			2.5								19.2
Adjusted EBITDA (Non-GAAP)		$	113.0							$	93.8							20.5	%
Adjusted EBITDA Margin (Non-GAAP)			19.4	%							18.4	%
(a) 2024 transaction-related expenses primarily associated with the Vian and CryoWorks acquisitions.
(b) 2023 transaction-related expenses primarily associated with the separation.
Totals may not sum due to rounding

CRANE COMPANY Non-GAAP Financial Measures (in millions, except per share data)
		Six Months Ended June 30,
		2024								2023								% Change
		$				Per Share				$				Per Share				(on $)
Net sales (GAAP)		$	1,146.5							$	1,023.4							12.0	%
Adjusted Operating Profit and Adjusted Operating Profit Margin
Operating profit (GAAP)		$	186.0							$	140.6							32.3	%
Operating profit margin (GAAP)			16.2	%							13.7	%
Special items impacting operating profit:
Transaction related expenses(a)(b)			12.7								32.2
Repositioning related charges, net			0.5								2.0
Adjusted operating profit (Non-GAAP)		$	199.2							$	174.8							14.0	%
Adjusted operating profit margin (Non-GAAP)			17.4	%							17.1	%
Adjusted Net Income and Adjusted Net Income per Share
Net income from continuing operations attributable to common shareholders (GAAP)		$	136.4			$	2.34			$	99.2			$	1.73			37.5	%
Transaction related expenses(a)(b)			12.1				0.21				32.2				0.56
Repositioning related charges, net			0.5				0.01				2.0				0.03
Impact of pension non-service costs			0.3				—				2.9				0.05
Interest expense			—				—				5.9				0.10
Tax effect of the Non-GAAP adjustments			(2.7	)			(0.04	)			(6.6	)			(0.11	)
Adjusted net income (Non-GAAP)		$	146.6			$	2.52			$	135.6			$	2.36			8.1	%
Adjusted EBITDA and Adjusted EBITDA Margin
Net income (GAAP)		$	136.4							$	99.2							37.5	%
Net income margin (GAAP)			11.9	%							9.7	%
Adjustments to net income:
Interest expense, net			12.1								10.2
Income tax expense			37.3								29.4
Depreciation			18.5								16.0
Amortization			8.2								3.0
Miscellaneous expense, net			0.2								1.8
Repositioning related charges, net			0.5								2.0
Transaction related expenses(a)(b)			9.3								32.2
Adjusted EBITDA (Non-GAAP)		$	222.5							$	193.8							14.8	%
Adjusted EBITDA Margin (Non-GAAP)			19.4	%							18.9	%
(a) 2024 transaction-related expenses are primarily associated with the Vian and CryoWorks acquisitions.
(b) 2023 transaction-related expenses are primarily associated with the separation.
Totals may not sum due to rounding

CRANE COMPANY Non-GAAP Financial Measures by Segment (unaudited, in millions)
Three Months Ended June 30, 2024		Aerospace & Electronics				Process Flow Technologies				Engineered Materials				Corporate				Total Company
Net sales		$	230.9			$	297.7			$	52.6			$	—			$	581.2
Operating profit (GAAP)		$	52.7			$	59.5			$	7.3			$	(22.9	)		$	96.6
Operating profit margin (GAAP)			22.8	%			20.0	%			13.9	%							16.6	%
Special items impacting operating profit:
Transaction related expenses(a)			2.2				1.3				—				2.4				5.9
Repositioning related charges, net			—				0.1				—				—				0.1
Adjusted operating profit (Non-GAAP)		$	54.9			$	60.9			$	7.3			$	(20.5	)		$	102.6
Adjusted operating profit margin (Non-GAAP)			23.8	%			20.5	%			13.9	%							17.7	%
Three Months Ended June 30, 2023
Net sales		$	189.2			$	263.2			$	57.2			$	—			$	509.6
Operating profit (GAAP)		$	38.3			$	50.6			$	9.8			$	(35.6	)		$	63.1
Operating profit margin (GAAP)			20.2	%			19.2	%			17.1	%							12.4	%
Special items impacting operating profit:
Transaction related expenses(b)			—				—				—				19.2				19.2
Repositioning related charges, net			—				2.0				(0.3	)			—				1.7
Adjusted operating profit (Non-GAAP)		$	38.3			$	52.6			$	9.5			$	(16.4	)		$	84.0
Adjusted operating profit margin (Non-GAAP)			20.2	%			20.0	%			16.6	%							16.5	%
(a) 2024 transaction-related expenses are primarily associated with the Vian and CryoWorks acquisitions.
(b) 2023 transaction-related expenses are primarily associated with the separation.
Totals may not sum due to rounding

CRANE COMPANY Non-GAAP Financial Measures by Segment (in millions)
Six Months Ended June 30, 2024		Aerospace & Electronics				Process Flow Technologies				Engineered Materials				Corporate				Total Company
Net sales		$	456.8			$	582.0			$	107.7			$	—			$	1,146.5
Operating profit (GAAP)		$	101.0			$	116.4			$	15.4			$	(46.8	)		$	186.0
Operating profit margin (GAAP)			22.1	%			20.0	%			14.3	%							16.2	%
Special items impacting operating profit:
Transaction related expenses(a)			4.6				3.2				—				4.9				12.7
Repositioning related charges , net			—				0.5				—				—				0.5
Adjusted operating profit (Non-GAAP)		$	105.6			$	120.1			$	15.4			$	(41.9	)		$	199.2
Adjusted operating profit margin (Non-GAAP)			23.1	%			20.6	%			14.3	%							17.4	%
Six Months Ended June 30, 2023
Net sales		$	369.3			$	534.6			$	119.5			$	—			$	1,023.4
Operating profit (GAAP)		$	75.9			$	113.9			$	21.2			$	(70.4	)		$	140.6
Operating profit margin (GAAP)			20.6	%			21.3	%			17.7	%							13.7	%
Special items impacting operating profit:
Transaction related expenses(b)			—				—				—				32.2				32.2
Repositioning related charges, net			—				2.3				(0.3	)			—				2.0
Adjusted operating profit (Non-GAAP)		$	75.9			$	116.2			$	20.9			$	(38.2	)		$	174.8
Adjusted operating profit margin (Non-GAAP)			20.6	%			21.7	%			17.5	%							17.1	%
(a) 2024 transaction-related expenses are primarily associated with the Vian and CryoWorks acquisitions.
(b) 2023 transaction-related expenses are primarily associated with the separation.
Totals may not sum due to rounding

CRANE COMPANY Adjusted Free Cash Flow (unaudited, in millions, except per share data)
		Three Months Ended June 30,								Six Months Ended June 30,
Cash Flow Items			2024				2023				2024				2023
Cash provided by (used for) operating activities from continuing operations		$	62.0			$	52.4			$	(17.9	)		$	(53.0	)
Less: Capital expenditures			(7.4	)			(11.6	)			(16.5	)			(20.5	)
Free cash flow		$	54.6			$	40.8			$	(34.4	)		$	(73.5	)
Adjustments:
Transaction-related expenses		$	2.4			$	19.2			$	5.1			$	32.2
Adjusted free cash flow		$	57.0			$	60.0			$	(29.3	)		$	(41.3	)

Crane Company reports its financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). This press release includes certain non-GAAP financial measures, including adjusted operating profit, adjusted operating profit margin, adjusted net income, adjusted EPS, adjusted EBITDA, Free Cash Flow and Adjusted Free Cash Flow, that are not prepared in accordance with GAAP. These non-GAAP measures are an addition, and not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP and should not be considered as an alternative to operating income, net income or any other performance measures derived in accordance with GAAP. We believe that these non-GAAP measures of financial results (including on a forward-looking or projected basis) provide useful supplemental information to investors about Crane Company. Our management uses certain forward looking non-GAAP measures to evaluate projected financial and operating results. However, there are a number of limitations related to the use of these non-GAAP measures and their nearest GAAP equivalents. For example, other companies may calculate non-GAAP measures differently or may use other measures to calculate their financial performance, and therefore our non-GAAP measures may not be directly comparable to similarly titled measures of other companies.

Reconciliations of certain forward-looking and projected non-GAAP measures for Crane Company, including Adjusted EPS, and Adjusted segment margin to the closest corresponding GAAP measure are not available without unreasonable efforts due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures, which could have a potentially significant impact on our future GAAP results. For Crane Company, these forward looking and projected non-GAAP measures are calculated as follows:

• "Adjusted operating margin" is calculated as adjusted operating profit divided by sales. Adjusted operating profit is calculated as operating profit before Special Items which include transaction related expenses such as professional fees, and incremental costs related to the separation; and repositioning related charges. We believe that non-GAAP financial measures that exclude these items provide investors with an alternative metric that can assist in predicting future earnings and profitability that are complementary to GAAP metrics.

• "Adjusted EPS" is calculated as adjusted net income divided by diluted shares. Adjusted net income is calculated as net income adjusted for Special Items which include transaction related expenses such as professional fees, and incremental costs related to the separation; repositioning related charges; and, the impact of pension non-service costs. We believe that non-GAAP financial measures adjusted for these items provide investors with an alternative metric that can assist in predicting future earnings and profitability that are complementary to GAAP metrics.

We believe that each of the following non-GAAP measures provides useful information to investors regarding the Company’s financial conditions and operations:

• "Adjusted Operating Profit" and "Adjusted Operating Margin" add back to Operating Profit items which are outside of our core performance, some of which may or may not be non-recurring, and which we believe may complicate the interpretation of the Company’s underlying earnings and operational performance. These items include income and expense such as: transaction related expenses and repositioning related (gains) charges. These items are not incurred in all periods, the size of these items is difficult to predict, and none of these items are indicative of the operations of the underlying businesses. We believe that non-GAAP financial measures that exclude these items provide investors with an alternative metric that can assist in predicting future earnings and profitability that are complementary to GAAP metrics.

• "Adjusted Net Income" and "Adjusted EPS" exclude items which are outside of our core performance, some of which may or may not be non-recurring, and which we believe may complicate the presentation of the Company’s underlying earnings and operational performance. These measures include income and expense items that impacted Operating Profit such as: transaction related expenses and repositioning related (gains) charges. Additionally, these non-GAAP financial measures exclude income and expense items that impacted Net Income and Earnings per Diluted Share such as the impact of pension non-service costs. These items are not incurred in all periods, the size of these items is difficult to predict, and none of these items are indicative of the operations of the underlying businesses. We believe that non-GAAP financial measures that exclude these items provide investors with an alternative metric that can assist in predicting future earnings and profitability that are complementary to GAAP metrics.

• "Adjusted EBITDA" adds back to net income: net interest expense, income tax expense, depreciation and amortization, miscellaneous (income) expense, net, and Special Items including transaction related expenses. "Adjusted EBITDA Margin" is calculated as adjusted EBITDA divided by net sales. We believe that adjusted EBITDA and adjusted EBITDA margin provide investors with an alternative metric that may be a meaningful indicator of our performance and provides useful information to investors regarding our financial conditions and results of operations that is complementary to GAAP metrics.

• “Free Cash Flow” and “Adjusted Free Cash Flow” provide 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 principal payments on the Company’s long-term debt. Free Cash Flow is calculated as cash provided by operating activities less capital spending. Adjusted Free Cash Flow is calculated as Free Cash Flow adjusted for certain cash items which we believe may complicate the interpretation of the Company’s underlying free cash flow performance such as certain transaction related cash flow items related to the separation transaction. These items are not incurred in all periods, the size of these items is difficult to predict, and none of these items are indicative of the operations of the underlying businesses. We believe that non-GAAP financial measures that exclude these items provide investors with an alternative metric that can assist in predicting future cash flows that are complementary to GAAP metrics.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240729497894/en/

Jason D. Feldman

Senior Vice President, Investor Relations, Treasury & Tax

Allison Poliniak-Cusic

Vice President, Investor Relations

IR@Craneco.com

www.craneco.com

Source: Crane Company

FAQ

What were Crane's (CR) Q2 2024 earnings per share?

Crane reported Q2 2024 earnings per share (EPS) of $1.23, up 64% year-over-year. Adjusted EPS was $1.30, an increase of 18% compared to the same period last year.

How much did Crane's (CR) sales grow in Q2 2024?

Crane's sales in Q2 2024 grew by 14% to $581 million, driven by 9% core sales growth and a 6% contribution from acquisitions.

What is Crane's (CR) updated full-year 2024 EPS guidance?

Crane raised and narrowed its full-year 2024 adjusted EPS guidance to a range of $4.95 to $5.15, up from the previous range of $4.75 to $5.05.

How did Crane's (CR) Aerospace & Electronics segment perform in Q2 2024?

The Aerospace & Electronics segment reported a 22% increase in sales to $231 million, with a 360 basis point improvement in adjusted operating profit margin to 23.8%.