Crane Co. Reports Record First Quarter Results

Business Wire, April 21, 2008

EPS Increased 11% to $0.79 from $0.71

First Quarter 2008 Highlights (vs. 2007):

* Sales increased 8% to $679 million

* Operating profit increased 10% to $ 75 million

* Operating profit margin was 11.1%, up from 10.9%

* Earnings per share increased 11% to $0.79 per share

STAMFORD, Conn. -- Crane Co. (NYSE: CR), a diversified manufacturer of highly engineered industrial products, reported first quarter 2008 net income was $48.4 million, or $0.79 per share, compared with net income of $43.6 million, or $0.71 per share, in the first quarter of 2007.

First quarter 2008 sales increased $50.7 million, or 8%, including core business growth of $16.9 million (3%), sales from acquired / divested businesses of $10.3 million (1%) and favorable foreign currency translation of $23.5 million (4%).

Order backlog at March 31, 2008 totaled $769 million, 5.8% higher than the backlog of $727 million at March 31, 2007 and 6.8% higher than $720 million at December 31, 2007.

"We are pleased with our strong start to the year and the excellent earnings growth from our Fluid Handling and Merchandising Systems businesses, both of which increased earnings by over 40%," said Crane Co. president and chief executive officer, Eric C. Fast. "As anticipated, these strong results were partially offset by continued high levels of engineering spending for the new Boeing 787 brake control system, and softening markets in Engineered Materials. Overall we continue to see considerable opportunities in the markets we serve."

Cash Flow and Financial Position

Cash provided by operating activities was $44.1 million in the first quarter of 2008, compared to $36.9 million last year which included the receipt of $31.5 million in escrowed funds from the asbestos insurance settlement with Equitas. Net debt to net capitalization was 11.1% at March 31, 2008, compared with 11.5% at December 31, 2007. In the first quarter of 2008, the Company repurchased 957,570 shares of its common stock on the open market at a cost of $40 million. The Company's cash position was $295 million at the end of the first quarter, up from $134 million at March 31, 2007. (Please also see the attached Condensed Statement of Cash Flows and Non-GAAP Financial Measures.)

Segment Results

All comparisons below refer to the first quarter 2008 versus the first quarter 2007, unless otherwise specified.

Aerospace & Electronics

[TABLE OMITTED]

The first quarter 2008 sales increase of $10.1 million reflected a sales increase of $11.1 million in the Aerospace Group and a decrease of $1.0 million in the Electronics Group. Segment operating profit declined by $5.0 million as a result of a $10 million increase in engineering expenses which were primarily related to products for the Boeing 787 and Airbus A400M programs. Excluding the investment in these two new programs, the segment continued to experience solid operating results.

Engineered Materials

[TABLE OMITTED]

Core segment sales were down $13.7 million, or 16%, related to lower volumes to the Company's traditional recreational vehicle and transportation and building products customers, partially offset by $8.7 million of sales related to the September 2007 acquisition of the composite panel business of Owens Corning. Operating profit in 2008 decreased 27% reflecting lower core business sales, higher raw material costs, and costs associated with the integration of the acquisition.

Merchandising Systems

[TABLE OMITTED]

Merchandising Systems had record sales and operating profit in the first quarter. Strong organic sales growth of 17% was driven by increased sales in Vending Solutions and continued strong global demand for Payment Solutions. Higher sales volumes were effectively leveraged into higher operating profit, which increased $4.5 million, or 47%. Vending sales increases were led by the successful introduction of the BevMax III glass front vender.

Fluid Handling

[TABLE OMITTED]

First quarter 2008 sales and operating profit were records for this segment. First quarter 2008 sales increased $25.5 million, or 10%, including $11.7 million (4%) of core sales and favorable foreign currency translation of $17.2 million (7%) offset by sales from divested businesses of $3.4 million (1%). Based on strong sales growth from the global chemical / pharmaceutical and energy industries, throughput efficiencies and solid pricing discipline, operating profit increased $13.6 million, or 44%, and profit margin increased to 15.5%, exceeding our previously announced goal of 15%.

The Fluid Handling segment backlog was $268 million at March 31, 2008, an increase of 11% over $243 million at December 31, 2007.

Controls

[TABLE OMITTED]

The first quarter 2008 sales increase of $3.9 million reflects $4.9 million of sales related to the August 2007 acquisition of the Mobile Rugged Business division of Kontron America, Inc. Core segment sales and operating profit were impacted by timing of customer projects on orders we have already won and by the final integration costs associated with the Mobile Rugged Business acquisition.