<PAGE>
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
(x) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 1993
-----------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _______________ to _______________
Commission file number 1-1657
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CRANE CO.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-1952290
- ------------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No)
100 First Stamford Place, Stamford, CT 06902
- ---------------------------------------- --------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203) 363-7300
-------------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
----------------------- ------------------------
Common shares, par value $1.00 New York Stock Exchange
Preferred Share Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
5% convertible subordinated debentures due July, 1994
8 1/2% senior notes due March, 2004
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(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2)has been subject to such filing
requirements for the past 90 days. Yes X No
----- -----
Indicate by check mark if the disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. ( )
Based on the closing sales price of March 16, 1994 the aggregate market value of
the voting stock held by nonaffiliates of the registrant was $848,556,957.
The number of shares outstanding of the registrant's common stock, $1.00 par
value was 29,905,091 at March 16, 1994.
DOCUMENTS INCORPORATED BY REFERENCE
-----------------------------------
Portions of the annual shareholders report for the year ended December 31, 1993
are incorporated by reference into Parts I, II and IV.
Portions of the proxy statement for the annual shareholders meeting May 9, 1994
are incorporated by reference into Parts I and III.
<PAGE>
PART I
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Item 1. Business
--------
The company is a diversified manufacturer of engineered industrial
products, serving niche markets in aerospace, fluid handling, automatic
merchandising and the construction industry. The company's wholesale
distribution business serves the building products markets and industrial
customers. Founded in 1855, Crane Co. employs over 8,700 people in North
America, Europe and Australia.
The company's strategy is to maintain a balanced business mix, to focus on
niche businesses with high market share and to avoid capital-intensive and
cyclical businesses.
In the past five years, the company has completed seven acquisitions. In
1990 it acquired Lear Romec, a manufacturer of lubrication and fuel pumps for
the aerospace industry. In 1992, certain assets of Jenkins Canada, Inc., a
manufacturer of bronze and iron valves, were acquired as an addition to the
company's North American valve unit. In 1993, the company made five
acquisitions. Perflow Instruments, Ltd., a British manufacturer of pressure
and flow measurement equipment, was added to Crane Ltd. Huttig Sash and Door
Company expanded its nationwide millwork distribution by acquiring Rondel's
Inc., a millwork distributor serving the eastern Washington/western Idaho
region, and the Whittier-Ruhle Millwork Company, serving the Mid-Atlantic
region. The company significantly expanded its position as a supplier of
fiberglass reinforced plastic (FRP) panels to the recreational vehicle market
with the acquisition of Filon. Filon was integrated with the company's
Kemlite unit in the fourth quarter of 1993. The company acquired Burks Pumps,
Inc., a manufacturer of engineered pumps, in December 1993. This acquisition
will complement the company's Chempump and Deming pump businesses and
significantly increases its involvement in niche markets in the pump industry.
In 1990 the company sold Sea-Pac Sales Co., a distributor of floor
covering products, and its McAvity division, a Canadian manufacturer of
waterwork valves and hydrants for an aggregate sales price of approximately
$19 million. In April 1993, the company sold its precision ordnance business,
UniDynamics/Phoenix for approximately $6 million.
During March 1992 the company sold $100,000,000 8 1/2% notes that will
mature on March 15, 2004.
See page 24 of the Annual Report to Shareholders for the contributions to
the company's sales and operating profit of each of its business segments and
the assets employed in each segment.
ENGINEERED INDUSTRIAL PRODUCTS
------------------------------
This segment is composed of operations that design and manufacture
engineered products and systems for the aerospace, fluid handling, automatic
merchandising, transportation, commercial construction and defense markets.
The company serves the global valve market through manufacturing
facilities in North America, the United Kingdom and Australia. The company
sells a wide variety of valves and fluid control products for the chemical,
processing, power and general industrial and commercial construction
industries. Products include gate, globe, check, angle, ball and butterfly
valves of steel, carbon and stainless steel, alloy, iron, cast iron and bronze
designed for use under various pressures and temperatures, along with pipe
fittings, actuators, pumps and flow measurement equipment. The North American
unit also provides a full range of valve aftermarket services including parts,
repairs, and modifications through eight service centers and the company's
subsidiary in the United Kingdom also maintains repair and service facilities
for valves, pumps, compressors, heat exchangers and similar equipment.
-1-
<PAGE>
PART I
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Item 1. Business (continued)
--------
Crane Pumps & Systems manufactures pumps used in the chemical, power,
hydro-carbon processing, municipal, general industrial and commercial
industries. Products include sealless canned motor pumps designed to handle
environmentally hazardous fluids, horizontal and vertical centrifugal pumps,
standard vertical turbine pumps, submersible wastewater pumps, regenerative
turbine, end suction centrifugal pumps, submersible deaerator pumps, split
case pumps, and in-line pumps. The pumps are marketed under the Chempump,
Deming, Barnes, Burks, Weinman and Prosser brand names.
The company's Cochrane Environmental Systems division designs and markets
water and wastewater treatment equipment for almost every major industry.
Cochrane's products include deaerators, demineralizers, hot and cold process
softeners, dealkalizers, filters, multiport relief valves, condensate drainage
systems and clarifiers. These products have applications for boiler feed,
industrial processes and wastewater treatment and recovery and are sold
principally to public utilities and authorities and major industrial plants.
The above products are sold directly to end users through Crane's sales
organizations and through independent distributors and manufacturers'
representatives.
The company designs, manufactures and sells, under the name "Hydro-Aire",
anti-skid and automatic brake control systems, fuel and hydraulic pumps, and
other aerospace components for the commercial, military and general aircraft
industries as original equipment. In addition, the company designs and
manufactures systems similar to those above for the retrofit of aircraft with
improved systems and manufactures replacement parts for systems installed as
original equipment by the aircraft manufacturer. All of these products are
largely proprietary to the company and, to some extent, are custom designed to
the requirements and specifications of the aircraft manufacturer or program
contractor. These systems and replacement parts are sold directly to
airlines, governments, and aircraft maintenance and overhaul companies.
Lear Romec designs, manufactures and sells pumps and fluid handling
systems for military and commercial aerospace industries. Lear Romec has a
leading share of the non-captive market for turbine engine lube and scavenge
oil pumps. Also, it is the leading supplier of fuel boost and transfer pumps
for commuter and business aircraft.
The company, through Resistoflex/Defense, designs and manufactures high
performance fittings used primarily in military aircraft under the name
"Dynatube". The company, through Crane Defense Systems is engaged in the
development and manufacture of specialized handling systems, elevators, ground
support equipment, cranes and associated electronics. These products are sold
directly to the government and defense contractors and represented less than
2% of 1993 sales.
Ferguson designs and manufactures, in the United States and through
Ferguson Machine S. A. in Europe, precision index and transfer systems for use
on and with machines which perform automatic forming, assembly, metal cutting,
testing and inspection operations. Products include index drives and tables,
mechanical parts handlers, inline transfer machines, rotary tables, press
feeds and custom cams. These products are sold through company and
independent sales representatives and distributors.
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<PAGE>
PART I
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Item 1. Business (continued)
--------
Kemlite manufactures fiberglass-reinforced plastic panels for use
principally by the transportation industry in refrigeration and dry van truck
trailers and recreational vehicles. Kemlite products are also sold to the
commercial construction industry for food processing, fast food restaurant and
supermarket applications, and to institutions where fire rated materials with
low smoke generation and minimum toxicity are required. Kemlite sells its
products directly to the truck trailer and recreational vehicle manufacturers
and uses distributors to serve its commercial construction market.
Cor Tec is the leading domestic manufacturer of fiberglass-reinforced
laminated panels. The primary market for these panels is the truck and truck
trailer segment of the transportation industry. Cor Tec markets its products
directly to the truck and truck trailer manufacturers.
Resistoflex/Industrial is engaged in the design, manufacture and sale of
plastic-lined steel pipe, fittings, valves, bellows and hose used primarily by
the pharmaceutical, chemical processing, pulp and paper, petroleum
distribution, and waste management industries. Resistoflex sells its products
through industrial distributors who provide stocking and fabrication services
to industrial users in the United States.
The Canadian operations of the company are conducted by Crane Canada,
Inc., a wholly-owned subsidiary. Crane Canada manufactures plumbing fixtures
and related building products. The unit commands a large share of the
Canadian market for these products.
Polyflon manufactures radio frequency and microwave components,
substrates, capacitors, and antennas for commercial and aerospace uses, and
resonating structures for the medical industry.
National Vendors is the largest domestic manufacturer of full line vending
machines for the automatic merchandising industry. Products include machines
which dispense snacks, refrigerated and frozen foods, hot and cold beverages
and postal commodities. These products are marketed in North America directly
to vending machine operators. In Europe products are marketed through wholly-
owned subsidiaries with operations located in the United Kingdom, Germany and
France.
National Rejectors, GmbH designs and manufactures electronic coin
validators and handling systems for vending operations throughout Europe.
These devices are sold directly to the vending, amusement, soft-drink, and
ticket issuing industries.
WHOLESALE DISTRIBUTION
----------------------
The company distributes millwork products through its wholly-owned
subsidiary, Huttig Sash & Door Company ("Huttig"). These products include
doors, windows, moldings and related building products. Huttig assembles
certain of these products to customer specification prior to distribution.
Its principal customers are building material dealers and building contractors
that service the new construction and remodeling markets. Wholesale
operations are conducted nationally through forty-seven branch warehouses
throughout the United States, in both major and medium-sized cities. Huttig's
sales are made on both a direct shipment and out-of-warehouse basis entirely
through its own sales force.
Huttig maintains a saw mill and a manufacturing plant in Missoula,
Montana, where it produces certain of the above products and other finished
lumber, the bulk of which is sold directly to third parties, some of whom
compete with Huttig branches. In addition, Huttig manufactures wood windows
in Rock Hill, South Carolina.
Valve Systems and Controls is a value added industrial distributor
providing power operated valves and flow control systems to the petroleum,
chemical, power and general processing industries. It services its customers
through facilities in Texas, Louisiana, Oklahoma and California.
-3-
<PAGE>
PART I
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Item 1. Business (continued)
--------
Canadian wholesale operations are conducted through the Crane Canada
Supply Division of Crane Canada, Inc. This division, a distributor of
plumbing supplies, valves and piping, maintains thirty-seven branches
throughout Canada and is the largest single distributor for Crane manufactured
products. This division also distributes products which are both
complementary to and partly competitive with Crane Canada's own manufactured
products.
COMPETITIVE CONDITIONS
----------------------
The company's lines of business are conducted under actively competitive
conditions in each of the geographic and product areas they serve. Because of
the diversity of the classes of products manufactured and sold, they do not
compete with the same companies in all geographic or product areas.
Accordingly, it is not possible to estimate the precise number of competitors
or to identify the principal methods of competition. Although reliable
statistics are not available, management believes the company and its
subsidiaries are important manufacturers or suppliers in a number of market
niches and geographic areas it serves.
The company's products have primary application in the industrial,
construction, aerospace, automated merchandising, transportation, and fluid
handling industries. As such, they are dependent upon numerous unpredictable
factors, including changes in market demand, general economic conditions,
residential and commercial building starts, capital spending, energy
exploration and energy allocations during times of scarcity. Since these
products are also sold in a wide variety of markets and applications,
management does not believe it can reliably quantify or predict the possible
effects upon its business resulting from such changes.
Seasonality is a considerable factor in Huttig and the Canadian
operations.
Order backlog totalled approximately $226 million as of December 31, 1993,
compared with $262 million as of December 31, 1992. Management believes
backlog is not material to understanding its overall business because long-
term contracts are not customary to significant portions of its business,
except within the defense and aerospace related businesses.
RECENT DEVELOPMENTS
-------------------
On March 18, 1994 pursuant to a tender offer, Crane Acquisition Corp., a
wholly owned subsidiary of Crane ("Crane Acquisition"), acquired 5,620,383
shares of the common stock of ELDEC Corporation ("ELDEC") at $13.00 per share.
With this purchase, Crane Acquisition Corp. acquired 98.7 percent of the
outstanding shares of ELDEC and thereafter consummated the merger of ELDEC
into Crane Acquisition Corp., each remaining share of ELDEC common stock would
be converted into the right to receive $13.00 in cash. Therefore, ELDEC is
now a wholly owned subsidiary of Crane. Funds in the amount of up to
$74,000,000 required for the acquisition of ELDEC have been made available
through short-term credit lines.
ELDEC, a Washington based corporation, designs, manufactures and markets
custom electronic and electromechanical products and systems for applications
that are technically and environmentally demanding. The company serves both
the commercial and military aerospace markets, and its major customers are
airframe and aircraft engine manufacturers and electronic systems
manufacturers. The company has four product lines; sensing systems that
monitor the status of aircraft landing gear, doors and flight surfaces; low
voltage and high voltage power supplies for avionic and defense electronic
systems; monitor and control devices for aircraft engines, including
flowmeters and engine diagnostic systems; battery chargers, transformer-
rectifiers and other devices that regulate DC power on an aircraft.
For the year ended March 31, 1993, ELDEC had net sales of $108,415,000,
net income of $2,430,000, and total assets of $112,235,000.
-4-
<PAGE>
PART I
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Item 1. Business (continued)
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The company's engineering and product development activities are directed
primarily toward improvement of existing products and adaptation of existing
products to particular customer requirements. While the company owns numerous
patents and licenses, none are of such importance that termination would
materially affect its business. Product development and engineering costs
aggregated approximately $18,300,000 in 1993 ($19,200,000 and $18,600,000 in
1992 and 1991, respectively). In addition, approximately $139,000,
$4,100,000, and $6,900,000 were received by the company in 1993, 1992, and
1991, respectively, for customer sponsored research and development relating
to projects within the Engineered Industrial Products segment.
Costs of compliance with federal, state and local laws and regulations
involving the discharge of materials into the environment or otherwise
relating to the protection of the environment are not expected to have a
material effect upon the company or its competitive position.
Item 2. Properties
<TABLE>
<CAPTION>
MANUFACTURING FACILITIES* NUMBER AREA
- -------------------------------------------- ------ -----------------
<S> <C> <C>
Engineered Industrial Products
United States 25 3,323,000 sq. ft.
Canada 5 739,000 sq. ft.
Other International 6 945,000 sq. ft.
Wholesale Distribution 3 552,000 sq. ft.
</TABLE>
*Includes plants under lease agreements:
<TABLE>
<CAPTION>
Leases
Expiring
Number Area Through
------ --------------- --------
<S> <C> <C> <C>
United States 3 152,000 sq. ft. 1995
Canada 1 10,000 sq. ft. 1995
Other International 2 41,000 sq. ft. 2006
</TABLE>
Engineered Industrial operates seven valve service centers in the United
States, of which three are owned. The company also operates internationally
nine distribution and eight service centers.
Wholesale Distribution has forty-seven Huttig branch warehouses in the
United States, of which twenty-nine are owned. The Canadian wholesale
operation maintains thirty-seven distribution branch warehouses in Canada, of
which sixteen are owned. Valve Systems and Controls operates four leased
distribution facilities in the United States.
In the opinion of management, properties have been well maintained, are in
sound operating condition, and contain all necessary equipment and facilities
for their intended purposes.
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<PAGE>
PART I
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Item 3. Legal Proceedings
-----------------
Neither the company, nor any subsidiary of the company has become a party
to, nor has any of their property become the subject of any material legal
proceeding other than ordinary routine litigation incidental to their
businesses.
The following proceeding is included herein because it has been reported
in the media. On September 22, 1992 the company was served with a complaint
filed in the U.S. District Court, Eastern District of Missouri naming the
company and its former subsidiary CF&I Steel Corporation ("CF&I") as
defendants and alleging violations of the False Claims Act in connection with
the distribution of CF&I to the company's shareholders in 1985 (Civil Actions
Nos. 91-0429-C-1 and 4:92CV00514JCH). The complaint alleges a continuing
agreement and concert of action between the company and CF&I to distribute
CF&I to the company's shareholders, thereafter to terminate CF&I's pension
plan so as to cause the Pension Benefit Guaranty Corporation ("PBGC") to
assume CF&I's liability for $140 million in unfunded pension liabilities and
to prevent the PBGC from obtaining any reimbursement from the company, and to
publish and file misleading information in furtherance of that objective. The
complaint seeks treble damages and attorney's fees. The company believes it
has defenses to the complaint on the grounds, among others, that the
allegations are without merit, the plaintiff has no standing and the False
Claims Act does not apply. On June 1, 1993 the federal court in the Eastern
District of Missouri dismissed the complaint for lack of standing of the
plaintiff. The plaintiff has filed an appeal. The company expects the
dismissal to be affirmed by the appellate court.
The following proceedings are not considered by the company to be material
to its business or financial condition and are reported herein because of the
requirements of the Securities and Exchange Commission with respect to the
descriptions of administrative or judicial proceedings by governmental
authorities arising under federal, state or local provisions regulating the
discharge of materials into the environment or otherwise relating to the
protection of the environment.
In a letter dated October 15, 1992 the office of the Attorney General of
the State of Ohio advised Cor Tec, a division of Dyrotech Industries, Inc.
which is a subsidiary of the company, that Cor Tec's plant facility in
Washington Court House, Ohio, had operated numerous air contaminant sources in
its manufacturing process which emitted air pollutants for an extended period
of time without the required state permits. The Ohio Attorney General's
office also alleged that certain contaminant sources at the Cor Tec facility
were installed without obtaining permits to install. The main air contaminant
in question is styrene, a volatile organic compound that is alleged to be a
carcinogen. Cor Tec recently constructed an air remediation system in its
plant which included the installation of a hood, vent and incinerator to
capture and incinerate the styrene emissions. At a meeting in Columbus, Ohio
on March 4, 1993 the Attorney General's office proposed that Cor Tec and the
company sign a Consent Decree which would include general injunctive relief
and civil penalties in the amount of $4.6 million. Cor Tec has refused to
execute such a Decree or pay a penalty. No formal complaint has been filed by
the Ohio Attorney General against the company or Cor Tec with regard to the
styrene emissions. Cor Tec believes it has adequate defenses to the
allegations made by the Attorney General and it plans to vigorously resist
paying any damages, fines, or penalties.
On July 12, 1985 the company received written notice from the United
States Environmental Protection Agency (the "EPA") that the EPA believes the
company may be a potentially responsible party ("PRP") under the Federal
Comprehensive Environmental Response Compensations and Liability Act of 1980
("CERCLA") to pay for investigation and corrective measures which may be
required to be taken at the Roebling Steel Company site in Florence Township,
Burlington County, New Jersey (the "Site") of which its former subsidiary,
CF&I Steel Corporation ("CF&I") was a past owner and operator prior to the
enactment of CERCLA. The
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<PAGE>
PART I
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Item 3. Legal Proceedings (continued)
-----------------
stated grounds for the EPA's position was the EPA's belief that the company
had owned and/or operated the Site. The company had advised the EPA that such
was not the case and does not believe that it is responsible for any testing
or clean-up at the Site based on current facts. CF&I also has received
notice from the State of New Jersey Department of Environmental Protection,
Office of Regulatory Services ("NJDEP)", advising CF&I that an investigation
by the NJDEP had identified what was considered an existing and potential
environmental problem at the Site. As a past owner and operator at the Site,
CF&I was notified of the NJDEP's belief that further investigatory action was
needed to identify all potential environmental problems at the Site and
thereafter formulate and implement a remedial plan to address any identified
problems. The NJDEP has subsequently requested information from CF&I, and
CF&I has cooperated in providing information, including results of tests
which CF&I has conducted at the Site. The EPA identified sources of
contamination, which must be examined for potential environmental damage,
including: chemical waste drums, storage tanks, transformers, impressed gas
cylinders, chemical laboratories, bag house dust, rubber tires, inactive
railroad cars, wastewater treatment plants, lagoons, slag disposal areas, and
a landfill. On November 7, 1990 CF&I filed a petition for reorganization
and protection under Chapter 11 of the United States Bankruptcy Code. The EPA
has disclosed that two surface clean-ups have been performed at a cost in
excess of $2,000,000 and a further surface clean-up has been announced at an
estimated cost of approximately $5,000,000.
On July 1, 1991 the company received a letter from the EPA providing an
update of the clean-up at the Site. The EPA's July 1, 1991 letter describes a
proposed third phase of the investigation, including a Focused Feasibility
Study which defined the nature of contaminants and evaluated remedial
alternatives for two portions of the Site. The estimated cost for the
preferred remedy selected by the EPA for these locations is $12,000,000. In
the bankruptcy proceeding of CF&I the EPA was allowed an unsecured claim
against CF&I for $27.1 million related to EPA's environmental investigations
and remediation at the Roebling Site. Based on the analysis above, the
company does not believe it is responsible for any portion of the clean-up.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
There have been no matters submitted to a vote of security holders during
the fourth quarter of 1993.
-7-
<PAGE>
PART I
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EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------
The executive officers of the registrant are as follows:
<TABLE>
<CAPTION>
Officer
Name Position Business Experience Age Since
- ----------------------------- ----------------------------- ----------------------------- --- -----
<S> <C> <C> <C> <C>
Robert S. Evans Chairman, Chief Chairman, Chief 50 1974
Executive Officer Executive Officer and
and President President of the
company
Jeremiah P. Cronin(1) Vice President- Vice President - Finance 50 1989
Finance and and Chief Financial Officer
Chief Financial of the company, previously
Officer Senior Vice President Finance
and Administration of
Research-Cottrell, Inc.
L. Hill Clark(2) Executive Vice Executive Vice President of 49 1994
President the company, previously
President of Lear Romec,
and previously held
various positions
Allied Signal Inc.
Paul R. Hundt Vice President Vice President, Secretary 54 1976
Secretary and and General Counsel of the
General Counsel company
Robert J. Muller, Jr. Executive Vice Executive Vice President of 47 1988
President the company
Anthony D. Pantaleoni Vice President Vice President - Environment, 39 1989
Environment, Health & Safety, previously
Health & Safety Director of Environmental,
Health and Safety Audit
Programs of Hoechst Celanese,
Director of Environmental,
Health and Safety Affairs of
Specialty Chemicals Group
Richard B. Phillips Vice President Vice President - Human 50 1987
Human Resources Resources of the company
Michael L. Raithel Controller Controller of the company 46 1985
David S. Smith(3) Vice President- Vice President - Finance 37 1991
Finance and and Chief Financial Officer
Chief Financial of the company, previously
Officer Vice President - Corporate
Development of the company,
and previously Vice President
of Corporate Finance Bankers
Trust Company
Gil A. Dickoff Treasurer Treasurer of the company, 32 1992
previously Assistant Treasurer
of the company
</TABLE>
(1) Resigned March 16, 1994
(2) Effective January 27, 1994
(3) Effective March 21, 1994
-8-
<PAGE>
PART II
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The information required by Items 5 through 8 is hereby
incorporated by reference to Pages 6 through 27 of the Annual
Report to Shareholders.
Item 9. Changes in and Disagreements on Accounting and Financial Disclosure
-------------------------------------------------------------------
Not applicable
PART III
--------
Item 10. Directors and Executive Officers of the Registrant
--------------------------------------------------
The information required by Item 10 is incorporated by reference to the
definitive proxy statement which the company will file with the Commission
pursuant to Regulation l4A except that such information with respect to
Executive Officers of the Registrant is included, pursuant to Instruction 3,
paragraph (b) of Item 401 of Regulation S-K, under Part I.
Item l1. Executive Compensation
----------------------
The information required by Item l1 is incorporated by reference to the
definitive proxy statement which the company will file with the Commission
pursuant to Regulation l4A.
Item 12. Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------
The information required by Item 12 is incorporated by reference to the
definitive proxy statement which the company will file with the Commission
pursuant to Regulation 14A.
Item 13. Certain Relationships and Related Transactions
----------------------------------------------
The information required by Item 13 is incorporated by reference to the
definitive proxy statement which the company will file with the Commission
pursuant to Regulation 14A.
-9-
<PAGE>
PART IV
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Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
----------------------------------------------------------------
<TABLE>
<CAPTION>
Page
----
(a) Financial Statements and Schedules*:
<S> <C> <C>
Independent
Auditors'
Report................................................... 13
Schedule V Property, Plant and Equipment............ 14
Schedule VI Accumulated Depreciation, Depletion and
Amortization of Property, Plant and
Equipment............................... 15
Schedule VIII Valuation and Qualifying Accounts......... 16
Schedule IX Short-Term Borrowings..................... 17
Schedule X Supplementary Income Statement Information 18
</TABLE>
*The consolidated balance sheets of Crane Co. and subsidiaries as of
December 31, 1993 and 1992 and the related consolidated statements of
income, changes in common shareholders' equity and cash flows for the
years ended December 31, 1993, 1992 and 1991 and the financial review,
appearing on Pages 6 through 27 of Crane Co.'s Annual Report to
Shareholders which will be furnished with the company's proxy statement as
required by Regulation 14A, Rule 14a-3(c), are incorporated herein by
reference and are supplemented by schedules beginning on Page 14 of this
report.
All other statements and schedules for which provision is made in the
applicable regulation of the Securities and Exchange Commission have been
omitted because they are not required under related instructions or are
inapplicable, or the information is shown in the financial statements and
related notes.
(b) Reports on Form 8-K:
(1) 8-K filed January 12, 1994 regarding acquisition of Burks Pumps, Inc.
(2) 8-KA filed January 26, 1994 including financial statements of Burks
Pumps and Crane Co. pro forma.
(c) Exhibits to Form 10-K:
(3) Articles of Incorporation and By-laws:
There is incorporated by reference herein:
(a) The company's Articles of Incorporation contained in Exhibit D to
the company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1987.
(b) The company's by-laws contained in Exhibit A to the company's
Annual Report on Form 10-K for the fiscal year ended December 31,
1992
(4) Instruments Defining the Rights of Security Holders, including
Indentures:
(a) There is incorporated by reference herein:
(1) Preferred Share Purchase Rights Agreement contained in
Exhibit 1 to the company's Report on Form 8-K filed with the
Commission on July 12, 1988.
(2) Amendment to Preferred Share Purchase Rights Agreement
contained in Exhibit 1 to the company's Report on Form 8-K
filed with the Commission on June 29, 1990.
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<PAGE>
PART IV
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Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
----------------------------------------------------------------
(continued)
(b) There is incorporated by reference herein:
1) Indenture dated as of April 1,1991 between the
Registrant and the Bank of New York contained in Exhibit
4 to Registration Statement No. 33-39658.
2) Third Supplemental Indenture dated as of April 30, 1969
between Registrant and B of A contained in Exhibit 4.2
to Registration Statement No. 2-32586 (5% Convertible
Subordinated Debentures, Series B, due July 1, 1994).
(10) Material Contracts:
------------------
(iii)Compensatory Plans
Exhibit A:
The Crane Co. Restricted Stock Award Plan as amended through
May 10, 1993.
Exhibit B:
The Crane Co. Non-Employee Directors Restricted Stock Award
Plan as amended through May 10, 1993.
There is incorporated by reference herein:
(a.) The Crane Co. Restricted Stock Award Plan contained in
Exhibit 4.1.1 to Post-Effective Amendment No. 2 to the
Registrant's Registration Statement No. 33-22904 on Form S-8
filed on July 6, 1988 and the related agreements filed as
Exhibit 4.4.2-2 to Post-Effective Amendment No. 4, Exhibit
4.4.2-3 to Post-Effective Amendment No. 5 and Exhibit 4.4.2-
4 to Post-Effective Amendment No. 6, and Exhibit 4.4.2-5 to
Post-Effective Amendment No. 7.
(b.) The indemnification agreements entered into with Mr. R. S.
Evans, each other director of the company and Mr. P. R.
Hundt the form of which is contained in Exhibit C to the
company's definitive proxy statement filed with the
Commission in connection with the company's April 27, 1987
Annual Meeting.
(c.) The Crane Co. Retirement Plan for Non-Employee Directors
contained in Exhibit E to the company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1988.
(d.) The forms of Agreement and Supplemental Agreement between
the company and each of its five most highly compensated
officers which provide for the continuation of certain
employee benefits upon a change of control contained in
Exhibit E to the company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1989.
(e.) The Crane Co. Stock Option Plan as amended through May 6,
1991 contained in Exhibit 1(a)(2) to Post-Effective
Amendment No. 2 to the company's Registration Statement No.
33-18251 on Form S-8 filed with the Commission on November
2, 1987.
(11) Statement re computation of per share earnings:
Exhibit C:
Computation of net income per share.
(13) Annual report to security holders:
Exhibit D:
Annual Report to shareholders for the year ended December
31, 1993.
(22) Subsidiaries of the Registrant:
Exhibit E:
Subsidiaries of the Registrant.
(24) Consent of Experts and Counsel
Exhibit F:
Independent auditors' consent.
All other exhibits are omitted because they are not applicable or the
required information is shown elsewhere in this Annual Report on Form 10-
K.
-11-
<PAGE>
SIGNATURES
- ----------
Pursuant to the requirements of Section l3 or l5(d) of the Securities Exchange
Act of l934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
CRANE CO.
----------------------
(Registrant)
By D. S. Smith
-------------------------
D. S. Smith
Vice President-Finance
Date 3/28/94
-----------------
Pursuant to the requirements of the Securities Exchange Act of l934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
OFFICERS
--------
R. S. Evans
- --------------------------
R. S. Evans
Chairman, Chief Executive Officer, President and Director
Date 3/28/94
------------------
D. S. Smith M. L. Raithel
- -------------------------- --------------------------
D. S. Smith M. L. Raithel
Vice President-Finance Controller
Date 3/28/94 Date 3/28/94
---------------------- ----------------------
DIRECTORS
---------
<TABLE>
<S> <C> <C>
C. J. Queenan, Jr.
-------------------
C. J. Queenan, Jr.
Date 3/28/94
---------------
M. Anathan, III E. T. Bigelow A. A. Seeligson, Jr.
- ------------------------------- -------------------- -------------------------
M. Anathan, III E. T. Bigelow A. A. Seeligson, Jr.
Date 3/28/94 Date 3/28/94 Date 3/28/94
-------------------------- -------------------- -------------------
R. S. Forte' D. C. Minton B. Yavitz
- ------------------------------- ------------------ ------------------------
R. S. Forte' D. C. Minton B. Yavitz
Date 3/28/94 Date 3/28/94 Date 3/28/94
------------- -------------------- __________________
D. R. Gardner
------------------------
D. R. Gardner
Date 3/28/94
-------------------
</TABLE>
-12-
<PAGE>
INDEPENDENT AUDITORS' REPORT
- ----------------------------
To the Shareholders of Crane Co.:
We have audited the consolidated financial statements of Crane Co. and
subsidiaries as of December 31, 1993 and 1992, and for each of three years in
the period ended December 31, 1993 and have issued our report thereon dated
January 24, 1994 (except for the note "Subsequent Event" on page 21, as to which
the date is February 11, 1994); such financial statements and report are
included in your 1993 Annual Report to Shareholders and are incorporated herein
by reference. Our audits also included the consolidated financial statement
schedules of Crane Co., listed in Item 14. These financial statement schedules
are the responsibility of the Company's mamnagement. Our responsibility is to
express an opinion based on our audits. In our opinion, such financial
statement schedules, when considered in relation to the basic consolidated
financial statements taken as a whole, present fairly in all material respects
the information set forth therein.
Deloitte & Touche
January 24, 1994
-13-
<PAGE>
CRANE CO. AND SUBSIDIARIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
Years Ended December 31, 1993, 1992 and 1991
(In Thousands)
<TABLE>
<CAPTION>
Balance at Currency Balance at
Beginning Acquisitions Additions Divestitures Retirements Translation end of
of Year of Businesses at Cost of Businesses or Sales Reclasses Adjustments Year
------------ ------------- --------- ------------- ------------ --------------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1993
- ----
Land $ 20,422 $ 744 $ 1,518 $ - $ 116 $ - $ (43) $ 22,525
Buildings and
Improvements 114,958 7,992 16,129 - 741 47 (745) 137,640
Machinery and
Equipment 241,930 16,360 21,191 7,461 7,663 (47) (2,767) 261,543
-------- ------- ------- -------- ------- -------- -------- --------
$377,310 $ 25,096 $38,838 $ 7,461 $ 8,520 $ - $ (3,555) $421,708
======== ======== ======= ======= ============= ======== ======== ========
1992
- ----
Land $ 20,900 $ - $ - $ - $ 362 $ - $ (116) $ 20,422
Buildings and
Improvements 122,296 - 1,261 - 6,364 74 (2,309) 114,958
Machinery and
Equipment 239,160 1,034 21,913 - 7,055 (1,777)(1) (11,345) 241,930
-------- ------- ------- -------- ------- -------- -------- --------
$382,356 $ 1,034 $ 23,174 $ - $13,781 $ (1,703) $(13,770) $377,310
========= ======== ======== ======== ======= ======== ======== ========
1991
- ----
Land $ 21,004 $ - $ 11 $ - $ 108 $ - $ (7) $ 20,900
Buildings and
Improvements 125,019 - 2,633 - 5,310 - (46) 122,296
Machinery and
Equipment 242,923 - 18,796 - 21,247 - (1,312) 239,160
-------- ------- ------- -------- ------- -------- -------- --------
$388,946 $ - $21,440 $ - $26,665 $ - $ (1,365) $382,356
========= ======== ======= ======== ======= ======== ======== ========
</TABLE>
Rates of depreciation vary from three to twenty-five years in
consideration of the use and character of the assets.
(1) Includes $1,703 of computer software to other assets.
-14-
<PAGE>
CRANE CO. AND SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF PROPERTY,
PLANT AND EQUIPMENT
For the Years Ended December 31, 1993, 1992 and 1991
(In Thousands)
<TABLE>
<CAPTION>
Additions
Balance at Charged to Currency Balance
Beginning Acquisitions Costs and Divestitures Retirements Translation at End
of Year of Businesses Expenses of Businesses or Sales Reclasses Adjustments of Year
---------- ------------- --------- ------------- ----------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1993
- ----
Buildings and
improvements $ 57,129 $ 34 $ 4,555 $ - $ 740 $ (638) $ (453) $ 59,887
Machinery and
equipment 156,996 137 19,589 5,544 7,259 638 (2,130) 162,427
-------- -------- ------- ------- --------- ------- ------- --------
$214,125 $ 171 $24,144 $ 5,544 $ 7,999 $ - $(2,583) $222,314
======== ======= ======== ======= ========== ======= ======= ========
1992
- ----
Buildings and
improvements $ 54,721 $ - $ 4,594 $ - $ 733 $ (45) $(1,408) $ 57,129
Machinery and
equipment 150,731 - 19,125 - 4,879 45 (8,026) 156,996
-------- ------- ------- ------ --------- ------- ------- --------
$205,452 $ - $23,719 $ - $ 5,612 $ - $(9,434) $214,125
========= ======= ======== ====== ========= ======= ======= ========
1991
- ----
Buildings and
improvements $ 51,184 $ - $ 4,878 $ - $ 1,599 $ 170 $ 88 $ 54,721
Machinery and
equipment 149,529 - 18,845 - 16,880 (170) (593) 150,731
-------- ------ ------- ------ --------- ------- ------- -------
$200,713 $ - $23,723 $ - $18,479 $ - $ (505) $205,452
======== ====== ======== ====== ========= ======= ======= ========
</TABLE>
-15-
<PAGE>
CRANE CO. AND SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
(In Thousands)
<TABLE>
<CAPTION>
Balance at Additions Balance
Beginning Charged to at End
Description of Year Cost & Expenses Deductions of Year
- ----------------------------------- ---------- --------------- ---------- -------
<S> <C> <C> <C> <C>
Year Ended December 31, 1993:
- -----------------------------------
Allowance for doubtful accounts $ 859 $ 2,747 $ 1,552 $2,054
Allowance for cash discounts,
returns and allowances 812 11,839 11,651 1,000
------ ------- ------- ------
$1,671 $14,586 $13,203 $3,054
====== ======= ======= ======
Year Ended December 31, 1992:
- -----------------------------------
Allowance for doubtful accounts $1,268 $ 1,038 $ 1,447 $ 859
Allowance for cash discounts,
returns and allowances 708 7,805 7,701 812
------ ------- ------- ------
$1,976 $ 8,843 $ 9,148 $1,671
====== ======= ======= ======
Year Ended December 31, 1991:
- -----------------------------------
Allowance for doubtful accounts $ 389 $ 1,068 $ 189 $1,268
Allowance for cash discounts,
returns and allowances 701 7,709 7,702 708
------ ------- ------- ------
$1,090 $ 8,777 $ 7,891 $1,976
====== ======= ======= ======
</TABLE>
-16-
<PAGE>
CRANE CO. AND SUBSIDIARIES
SCHEDULE IX - SHORT-TERM BORROWINGS
(In Thousands)
<TABLE>
<CAPTION>
At December 31,
- --------------------------------- ----------------------------
Weighted Avg. Maximum Weighted Avg.
Balance Interest Month-End Avg. Balance Interest
Outstanding Rate Balance Outstanding(1) Rate (2)
----------- ---------- --------- ------------- ---------
<S> <C> <C> <C> <C> <C>
1993 $108,048 7.0% $108,048 $46,623 7.4%
======== ===== ======== ======= =====
1992 $ 32,906 9.3% $ 45,591 $36,917 8.9%
======== ===== ======== ======= =====
1991 $ 25,575 8.40% $ 27,621 $19,113 9.1%
======== ===== ======== ======= =====
</TABLE>
NOTES: (1) Average monthly borrowings are calculated using month-end
balances outstanding during the year.
(2) The approximated weighted average is calculated by dividing the
related interest expense by monthly average borrowings.
-17-
<PAGE>
CRANE CO. AND SUBSIDIARIES
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
(in Thousands)
<TABLE>
<CAPTION>
Item Charged to Costs and Expenses
---- -----------------------------
Years Ended December 31, 1993 1992 1991
- ------------------------ ------- ------- -------
<S> <C> <C> <C>
Maintenance and repairs $15,569 $17,173 $19,037
</TABLE>
NOTE: Amounts for amortization of intangible assets, taxes other
than payroll and income taxes, royalties and advertising costs are not
presented as such amounts are less than 1% of net sales.
-18-
<PAGE>
EXHIBIT 10
EXHIBIT A
CRANE CO.
RESTRICTED STOCK AWARD PLAN
(As Amended through May 10, 1993)
1. PURPOSES OF THE PLAN
The 1988 Restricted Stock Award Plan (the "Plan") for key officers and
employees of Crane Co. (the "Company") is intended to attract and retain
employees of the Company and its subsidiaries who are and will be contributing
to the success of the business; to motivate and reward outstanding employees who
have made significant contributions to the success of the Company and encourage
them to continue to give their best efforts to its future success; to provide
competitive incentive compensation opportunities; and to further opportunities
for stock ownership by such employees in order to increase their proprietary
interest in the Company and to increase their personal interest in its continued
success. Accordingly, the Company may, from time to time, on or before May 30,
1998, grant to selected key officers and employees ("Participants") awards of
shares of Common Stock par value $1.00, of the Company ("Common Stock") subject
to the terms and conditions hereinafter provided.
2. ADMINISTRATION OF THE PLAN
This Plan shall be administered by the Organization and Compensation
Committee of the Board of Directors of the Company or by such other Committee
composed of at least three members of the Board of Directors of the Company as
may be designated by the Board. Such Committee (the "Committee") is authorized
to interpret the Plan and may from time to time adopt such rules and regulations
for carrying out the Plan as it may deem appropriate. No member of the
Committee shall be eligible to participate in, and no person shall become a
member of the Committee if within one year prior thereto he or she shall have
been eligible to participate in this Plan or any other plan of the Company or
any of its affiliates (other than the 1988 Non-Employee Director Restricted
Stock Plan) entitling the participants therein to acquire stock, stock options,
stock appreciation rights or restricted stock of the Company or any of its
affiliates. Decisions of the Committee in connection with the administration of
the Plan shall be final, conclusive and binding upon all parties, including the
Company, stockholders and employees.
The Committee may employ attorneys, consultants, accountants or other
persons and the Committee and the Company and its officers and directors shall
be entitled to rely upon the advice, opinions or valuations of any such persons.
All usual and reasonable expenses of the Committee shall be paid by the Company.
No member shall receive
1
<PAGE>
compensation with respect to his services for the Committee except as may be
authorized by the Board of Directors. All actions taken and all interpretations
and determinations made by the Committee in good faith shall be final and
binding upon all employees who have received awards, the Company and all other
interested persons. No member of the Committee shall be personally liable for
any action, determination, or interpretation taken or made in good faith with
respect to the Plan or awards made thereunder, and all members of the Committee
shall be fully indemnified and protected by the Company in respect of any such
action, determination or interpretation.
Subject to the terms, provisions and conditions of this Plan as set forth
herein, the Committee shall have sole discretion and authority:
(a) to select the key officers and employees to receive awards under the
Plan (it being understood that more than one award may be granted to the same
person);
(b) to determine the number of shares to be awarded each recipient;
(c) to determine the restrictions as to period and the market value
threshold applicable to each award;
(d) to determine the time or times when awards may be granted and any
additional terms and conditions which may be placed upon receiving such award;
and
(e) to prescribe the form of agreement, legend or other instruments
evidencing any awards granted under this Plan.
"With respect to any outstanding awards, the Committee shall have sole
discretion and authority to modify at any time the restriction as to period (as
well as any schedule of installments for the lapse thereof), the market value
threshold applicable thereto, the terms and conditions placed thereon, and the
form of agreement, legend or other instrument evidencing such award provided
that no such modification shall increase the benefit under such award beyond
that which the Committee could have originally granted at the time of the award,
or shall impair the rights of any participant under such award except in
accordance with the Plan, or any applicable agreement, or applicable law, or
with consent of the participant."
3. STOCK SUBJECT TO THE PLAN
The aggregate number of shares of Common Stock which may be awarded under
the Plan shall not exceed 1,000,000 shares provided, however, effective May 10,
1993 the maximum number of shares which may be awarded under the Plan shall be
increased so that the number of shares available for grant under the Plan on and
after that date shall be 500,000 shares. Shares to be awarded under this Plan
shall be made
2
<PAGE>
available, at the discretion of the Board of Directors, either from the
authorized but unissued shares of Common Stock of the Company or from shares of
Common Stock reacquired by the Company, including shares purchased in the open
market. If any shares of Common Stock awarded under the Plan are reacquired by
the Company in accordance with Section 6(c) of the Plan, such shares shall again
become available for use under the Plan and shall be regarded as not having been
previously awarded.
4. ELIGIBILITY
Restricted stock shall be awarded only to key officers and employees of the
Company or of a subsidiary of the Company. The term "employees" shall include
officers as well as other employees of the Company and its subsidiaries and
shall include directors who are also employees of the Company or of a subsidiary
of the Company.
5. AWARDS AND CERTIFICATES
(a) The prospective recipient of an award of restricted stock shall not,
with respect to such award, be deemed to have become a participant or to have
any rights with respect to such award until and unless such recipient shall have
executed an agreement or other instrument evidencing the award and delivered a
fully executed copy thereof to the Company and otherwise complied with the then
applicable terms and conditions.
(b) Each participant shall be issued a certificate in respect of shares of
restricted stock awarded under the Plan. Such certificate shall be registered
in the name of the participant, and shall bear an appropriate legend referring
to the terms, conditions and restrictions applicable to such award substantially
in the following form:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) of the 1988 Restricted Stock Award Plan of Crane Co. and an
Agreement entered into between the registered owner and Crane Co. Copies
of such Plan and Agreement are on file in the offices of Crane Co., 100
First Stamford Place, Stamford, CT 06902."
(c) All certificates for restricted stock delivered under this Plan shall
be subject to such stock-transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations, and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Common
Stock is then listed and any applicable federal or state securities law, and the
Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.
3
<PAGE>
(d) The Committee may adopt rules which provide that the stock
certificates evidencing such shares may be held in custody by a bank or other
institution, or that the Company may itself hold such shares in custody until
the restrictions thereon shall have lapsed and may require, as a condition of
any award, that the participant shall have delivered a stock power endorsed in
blank relating to the stock covered by such award.
(e) Recipients of awards under this Plan are not required to make any
payment or provide consideration other than the rendering of services.
(f) The Committee will have the discretion, as to any award, to award a
separate cash amount, payable to the participant at the time when the forfeiture
restrictions on the restricted stock lapse or at such earlier time as a
participant may elect to be taxed with respect to such restricted stock equal to
(i) the federal income tax and golden parachute excise tax (if any) payable with
respect to the lapse of such restrictions or with respect to such election,
divided by (ii) one (1) minus the total effective federal income and excise tax
rate applicable as a result of the lapse of such restrictions or a result of
such election.
6. RESTRICTIONS AND FORFEITURES
The shares of Common Stock awarded pursuant to the Plan shall be subject to
the following restrictions and conditions:
(a) Subject to subparagraph (d) hereof, commencing with the date of each
award (the "Restriction Period"), the participant will not be permitted to sell,
transfer, pledge or assign restricted stock awarded under this Plan until the
expiration of the period set by the Committee or until the Common Stock attains
a threshold market value established by the Committee at the date of the award,
whichever is earlier. Within these limits the Committee may provide at the time
of the award for the lapse of such restrictions in installments where deemed
appropriate.
(b) Except as provided in Section 6(a), the participant shall have with
respect to the restricted stock all of the rights of a shareholder of the
Company, including the right to vote the shares and receive dividends and other
distributions.
(c) Subject to the provisions of Section 6(d), unless otherwise determined
by the Committee, upon termination of employment for any reason during the
restriction period, all shares still subject to restriction shall be forfeited
by the participant and will be reacquired by the Company.
(d) In the event of a participant's retirement, permanent total
4
<PAGE>
disability, or death or in the event of a change in control, all remaining
restrictions will lapse with respect to such participant's restricted stock. In
addition, in cases of special circumstances, the Committee may, in its sole
discretion when it finds that a waiver would be in the best interests of the
Company, waive in whole or in part any or all remaining restrictions with
respect to such participant's restricted stock. For purposes of this Plan, the
term "change in control" shall mean (i) the first purchase of shares pursuant to
a tender offer or exchange offer (other than a tender offer or exchange offer by
the Company) for all or part of the Company's Common Stock or any securities
convertible into such Common Stock, (ii) the receipt by the Company of a
schedule 13D or other advice indicating that a person is the "beneficial owner"
(as that term is defined in Rule 13d-3 under the Securities Exchange Act of 1934
(the "Exchange Act") of 20% or more of the Company's Common Stock calculated as
provided in paragraph (d) of said Rule 13d-3, (iii) the date of approval by
stockholders of the Company of an agreement providing for any consolidation or
merger of the Company in which the Company will not be the continuing or
surviving corporation or pursuant to which shares of Common Stock of the Company
would be converted into cash, securities or other property, other than a merger
of the Company in which the holders of Common Stock of the Company immediately
prior to the merger would have the same proportion of ownership of common stock
of the surviving corporation immediately after the merger, (iv) the date of the
approval by stockholders of the Company of any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all or
substantially all the assets of the Company (v) the adoption of any plan or
proposal for the liquidation (but not a partial liquidation) or dissolution of
the Company (vi) the date upon which the individuals who constitute the Board of
Directors of the Company (the "Board") as of April 25, 1988 (the "Incumbent
Board") cease for any reason to constitute at least a majority of the Board,
provided that any person becoming a director subsequent to such date who
election, or nomination for election by the Company's shareholders, was approved
by a vote of at least three-quarters of the directors comprising the Incumbent
Board (other than an election or nomination of an individual whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of the Directors of the Company, as such terms
are used in Rule l4a-ll of Regulation l4A promulgated under the Exchange Act)
shall be for purposes of this agreement, considered as though such person were a
member of the Incumbent Board.
(e) Notwithstanding the other provisions of this Section 6, the Committee
may adopt rules which would permit a gift by a participant of restricted stock
to a spouse, child, stepchild, grandchild or legal dependent or to a Trust whose
beneficiary or beneficiaries shall be either such a person or persons or the
participant.
(f) Any attempt to dispose of restricted stock in a manner
5
<PAGE>
contrary to the restrictions shall be ineffective.
(g) Nothing in this Section 6 shall preclude a participant from exchanging
any restricted stock for any other shares of Crane Common Stock that are
similarly restricted.
7. TERMINATION AND AMENDMENT
The Board of Directors may amend, suspend or terminate the Plan at any
time, provided that no such modification without the approval of shareholders
shall:
(a) materially increase the benefits accruing to participants under the
Plan or materially increase the maximum number of shares of Common Stock which
are available for awards under the Plan;
(b) extend the period during which awards may be granted under the Plan
beyond May 30, 1998; or
(c) impair the rights of any participant under any then outstanding award,
except in accordance with the Plan or any applicable agreement or applicable law
or with consent of the participant; or otherwise materially change the
requirements for eligibility under the Plan, except that any such increase or
modification that results from adjustments authorized by Section 8(a) does not
require such approval.
8. MISCELLANEOUS
(a) In the event that the number of outstanding shares of Common Stock of
the Company shall be changed by reason of split-ups or combinations of shares or
recapitalizations or by reason of stock splits, distributions or dividends, the
number of shares for which awards of restricted stock may be granted under this
Plan shall be appropriately adjusted as determined by the Board of Directors so
as to reflect such change.
(b) No employee or other person shall have any claim or right to be
granted shares of restricted stock under the Plan, and neither the Plan nor any
action taken thereunder shall be construed as giving any participant, recipient,
employee or other person any right to be retained in the employ of the Company.
(c) Income realized as a result of an award of restricted stock shall not
be included in the participant's earnings for the purpose of any benefit plan in
which the participant may be enrolled or for which the participant may become
eligible unless otherwise specifically provided for in such plan.
(d) The Company shall have the right to require the participant to pay to
the Company the cash amount of any taxes which the Company is
6
<PAGE>
required to withhold provided that anything contained herein to the contrary
notwithstanding, the committee may accept stock received in connection with the
award being taxed or otherwise previously acquired in satisfaction of
withholding requirements.
(e) Each award of restricted stock shall be evidenced by a written
agreement, executed by the employee and the Company, containing such
restrictions, terms and conditions as the Committee may require.
9. TERM OF PLAN
This Plan shall be submitted to the shareholders of the Company at the
Annual Meeting in 1988 and, if approved by the shareholders, shall become
effective April 25, 1988. No shares shall be awarded under the Plan after May
30, 1998.
7
<PAGE>
EXHIBIT B
CRANE CO.
NON-EMPLOYEE DIRECTOR
RESTRICTED STOCK PLAN
(As Amended through May 10, 1993)
l. PURPOSE: The purposes of the 1988 Non-Employee Director Restricted
Stock Plan (the "Plan") are to attract and retain well-qualified persons for
service as directors of Crane Co. (the "Company") to provide directors through
the payment of a portion of directors fees in shares of the Company Common
stock, $1.00 par value ("Common Stock"), with the opportunity to increase their
proprietary interest in the Company and thereby to increase their personal
interest in the Company's continued success.
2. ADMINISTRATION: Responsibility and authority to administer and
interpret the provisions of this Plan shall be conferred upon a committee of at
least three persons (all of whom shall be persons not eligible to participate in
the Plan) having full authority to act (the "Committee"). The members of the
Committee shall be the Chairman of the Board (provided that he is not eligible
to be a participant under the Plan), the Vice President Finance of the Company,
and at least one additional disinterested person to be elected by the Chairman.
The Committee shall record its proceedings under the Plan.
The Committee may employ attorneys, consultants, accountants or other
persons and the Committee, the Company and its officers and directors shall be
entitled to rely upon the advice, opinions or valuations of any such persons.
All usual and reasonable expenses of the Committee shall be paid by the Company.
No member shall receive compensation with respect to his services for the
Committee except as may be authorized by the Board of Directors. All actions
taken and all interpretations and determinations made by the committee in good
faith shall be final and binding upon all employees who have received awards,
the Company and other interested persons. No member of the Committee shall be
personally liable for any action, determination or interpretations taken or made
in good faith with respect to the Plan or awards made thereunder, and all
members of the Committee shall be fully indemnified and protected by the Company
in respect of any such action, determination or interpretation.
3. ELIGIBILITY: All directors of the Company who are not full-time
employees of the Company shall be participants in the Plan.
4. AWARDS: Directors shall be entitled to an annual director's fee which
is not dependent upon attendance at meetings (the "Base Fee"). The Base Fee
shall be payable in stock and cash as provided hereunder. The stock portion of
the Base Fee shall be determined pursuant to this SECTION 4. At the Company's
Annual Meeting each calendar year, each eligible director shall be awarded
<PAGE>
the number of full shares of Common stock of the Company (rounded to the nearest
ten shares) determined by dividing (i) the dollar amount equal to the excess of
(a) the Base Fee then in effect over (b) $15,000 by (ii) by the average of the
high and low prices of a share of Common Stock on the New York Stock Exchange-
Consolidated Trading on the day preceding the award date, or, if no sale of
Common Stock has been recorded on such date, then on the next preceding date on
which a sale was so made (the "Fair Market Value"). Each such award shall be
evidenced by a written agreement, executed by the director and the Company,
containing such restrictions, terms and conditions as the Committee may require.
A director who becomes a member of the Board of Directors after the Annual
Meeting in any year shall be awarded a prorated number of full shares of Common
Stock based on an allocation of such director's annual fee based on the number
of full months of service for that year. The price of Common Stock to be used
in determining the number of shares of Common Stock to which such director shall
be entitled for such year shall be the Fair Market Value of a share of Common
Stock, on the day next preceding the date of the director's election to the
Board.
5. VESTING:
(a) An award of Common Stock is forfeitable if the director ceases to
remain a member of the Board of Directors until the Annual Meeting of the year
following the year of the award, except in the case of death or disability (as
determined by the Committee), which disability renders the director unable to
continue to serve the Company or upon a change of control of the Company as set
forth in Paragraph 5(b) hereof. In the event of death or disability, an
allocated portion of the award for the year of death or disability, based on the
number of full months of service, shall become non-forfeitable and distributable
as of the date of such death or disability. Shares which are forfeited may be
regranted.
(b) Notwithstanding anything else herein, all restrictions on any
Common Stock that may have been awarded to a director hereunder shall lapse in
the event of a "change in control." For purposes of this Plan, the term "change
in control" shall mean (i) the first purchase of shares pursuant to a tender
offer or exchange offer (other than a tender offer or exchange offer by the
Company) for all or part of the Company's Common Stock or any securities
convertible into such Common Stock, (ii) the receipt by the Company of a
Schedule l3D or other advice indicating that a person is the "beneficial owner"
(as that term is defined in Rule l3d-3 under the Securities Exchange Act of l934
("Exchange Act") of 20% or more of the Company's Common Stock calculated as
provided in paragraph (d) of said Rule l3d-3, (iii) the date of approval by
stockholders of the Company of an agreement providing for any consolidation or
merger of the Company in which the Company will not be the continuing or
surviving corporation or pursuant to
<PAGE>
which shares of Common Stock of the Company would be converted into cash,
securities or other property, other than a merger of the Company in which the
holders of Common stock of the Company immediately prior to the merger would
have the same proportion of ownership of common stock of the surviving
corporation immediately after the merger, (iv) the date of the approval by
stockholders of the Company of any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all or substantially all
the assets of the Company, or (v) the adoption of any plan or proposal for the
liquidation (but not a partial liquidation) or dissolution of the Company or
(vi) the date upon which individuals who constitute the Board of Directors of
the Company (the "Board") as of April 25, 1988 (the "Incumbent Board") cease for
any reason to constitute at least a majority of the Board, provided that any
person becoming a director subsequent to such date whose election, or nomination
for election by the Company's shareholders, was approved by a vote of at least
three-quarters of the directors comprising the Incumbent Board (other than an
election or nomination of an individual whose initial assumption of office is in
connection with an actual or threatened election contest relating to the
election of directors of the Company, as such terms are used in Rule l4a-11 of
Regulation 14A promulgated under the Exchange Act) shall be, for purpose of this
Agreement, considered as though such person were a member of the Incumbent
Board.
6. TERMS AND CONDITIONS: The difference between the Base Fee and the
portion of such Base Fee awarded under the Plan in Common Stock (valued at Fair
Market Value) shall be paid to directors in cash on a monthly basis.
Until such time as the risk of forfeiture lapses or, the shares awarded are
forfeited, a director has the right to vote and to receive dividends on and
other distributions with respect to the shares awarded.
At such time as the risk of forfeiture lapses, a director's Common Stock
will have all the rights of any other Common stock. No payment will be required
from the director upon the issuance or delivery of any restricted stock, except
that any amount necessary to satisfy applicable federal, state or local tax
requirements shall be withheld or paid promptly upon notification of the amount
due and prior to or concurrently with the issuance or delivery of a certificate
representing such stock provided that anything contained herein to the contrary
notwithstanding, the Committee may accept stock received in connection with the
award being taxed or otherwise previously acquired in satisfaction of
withholding requirements.
No shares may be sold or transferred (including, without limitation,
transfer by gift or donation) during the period ending on the fifth anniversary
of the date of the award or the departure or resignation of the director from
the Board whichever is earlier; except with regard to shares which vest as a
result of death or
<PAGE>
disability (sales, assignments, or transfer of which will not be permissible in
the absence of an effective registration statement covering such shares or an
opinion of counsel for the Company, that such registration is not required by
reason of an exemption from the Securities Act of 1933) or upon a change of
control of the Company (as defined in Section 5(b) hereof), at which time all
restrictions on transfer shall lapse.
Up to 50,000 common shares of the Company may be issued pursuant to this
Plan provided, however, effective May 10, 1993 the maximum number of shares
which may be awarded under the Plan shall be increased so that the number of
shares available for grant under the Plan on and after that date shall be 50,000
shares. Shares of Common Stock issued pursuant to the Plan may be drawn from
authorized but unissued shares or from treasury, as determined by the Committee.
Such shares will not be registered under the Securities Act of 1933, as amended
(the "Act") and will be "restricted securities" as defined in the Act or rules
promulgated thereunder. Such shares may not be sold, assigned, transferred or
otherwise disposed of in the absence of an effective registration statement
covering such shares, or an opinion of counsel for the Company that such
registration is not required by reason of an exemption available under the Act.
Certificates for shares issued under the Plan shall bear an appropriate legend
reflecting such restrictions.
Prior to termination of the restriction on sale and transfer provided
herein, the certificates for the shares awarded pursuant to the Plan will be
held by the Company's Treasurer in custody for the Director.
The Committee shall appropriately adjust the number of shares for which
awards may be granted pursuant to the Plan in the event of reorganization,
recapitalization, stock split, reverse stock split, stock dividend, exchange or
combination of shares, merger, consolidation, rights offering, or any change in
capitalization.
7. AMENDMENT OR DISCONTINUANCE: The Board of Directors of the Company may
at any time amend, rescind or terminate the Plan, as it shall deem advisable;
provided, however, (i) that no change may be made in Awards theretofore granted
under the Plan which would impair participants' rights without their consent,
and (ii) that no amendment to the Plan shall be made without approval of the
Company's stockholders if the effect of such amendment would be to (a)
materially increase the number of shares reserved for issuance hereunder or
benefits accruing to participants under the Plan; (b) materially change the
requirements for eligibility under Section 3 hereof, (c) materially modify the
method for determining the number of shares awarded under Section 4 hereof;
except that any such increase or modification that results from adjustments
authorized by the last paragraph of Section 6 shall not require such approval.
<PAGE>
8. EFFECTIVE DATE AND TERM OF PLAN: The Plan shall become effective as of
April 25, 1988 and shall remain in effect until May 30, 1998. Awards granted
prior to such termination, shall, notwithstanding termination of the Plan,
continue to be effective and shall be governed by the Plan.
9. GOVERNING LAW: This Plan and all determinations made and actions taken
pursuant hereto shall be governed by the law of Delaware pertaining to contracts
made and to be performed wholly within such jurisdiction.
<PAGE>
EXHIBIT 11
(Page 1 of 2)
CRANE CO. AND SUBSIDIARIES
EXHIBIT C TO FORM 10-K
ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 1993
Computation of Net Income Per Share
(In Thousands Except Per Share Data)
<TABLE>
<CAPTION>
Primary 1993 1992 1991 1990 1989
- ----------------------------------- -------- -------- ------------ -------- --------
<S> <C> <C> <C> <C> <C>
Income before a change in
accounting $48,893 $24,286 $44,993 $62,735 $55,919
Cumulative effect of a change
in accounting - - (22,341)(a) - -
------- ------- -------- ------- -------
Net Income $48,893 $24,286 $22,652 $62,375 $55,919
======= ======= ======= ======= =======
Per common share before a change
in accounting $ 1.62 $ .79 $ 1.42 $ 1.96 $ 1.72
Cumulative effect of a change
in accounting - - (.70)(a) - -
------- ------- -------- ------- -------
Net income per share $ 1.62 $ .79 $ .72 $ 1.96 $ 1.72
======= ======= ======= ======= =======
Average number of primary
shares 30,217 30,845 31,628 32,057 32,583
</TABLE>
(a) Postretirement benefits other than pensions
<PAGE>
(Page 2 of 2)
CRANE CO.
EXHIBIT C TO FORM 10-K (CONTINUED)
ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 1993
Computation of Net Income Per Share
(In Thousands Except Per Share Data)
<TABLE>
<CAPTION>
Fully Diluted 1993 1992 1991 1990 1989
- ----------------------------------- -------- -------- ------------ -------- --------
<S> <C> <C> <C> <C> <C>
Income before a change in
accounting $48,893 $24,286 $44,993 $62,735 $55,919
Conversion of debentures:
Add back interest, net
of income tax 25 30 32 32 37
------- ------- ------- ------- -------
Income assuming conversion of
debentures before change in
accounting 48,918 24,316 45,025 62,767 55,956
Cumulative effect of a change
in accounting - - (22,341)(a) - -
------- ------- -------- ------- -------
Net income - assuming
conversion of debentures $48,918 $24,316 $22,684 $62,767 $55,956
======= ======= ======= ======= =======
Income per share before a change
in accounting $ 1.61 $ .78 $ 1.41 $ 1.94 $ 1.69
Cumulative effect of a change
in accounting - - (.70)(a) - -
------- ------- -------- ------- -------
Net income $ 1.61 $ .78 $ .71 $ 1.94 $ 1.69
======= ======= ======= ======= =======
Average number of primary shares 30,217 30,845 31,628 32,057 32,583
Add:
Adjustment to primary shares
for dilutive stock options
(ending market price higher
than average market price) - 18 55 - 176
Shares reserved for conversion
of debentures 187 217 231 242 277
------- ------- ------- ------- -------
Total average number of
shares 30,404 31,080 31,914 32,299 33,036
======= ======= ======= ======= =======
</TABLE>
(a) Postretirement benefits other than pensions
<PAGE>
EXHIBIT 13
Financial Highlights Crane Co. and Subsidiaries
(In thousands except per share data)
<TABLE>
<CAPTION>
1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Sales $1,310,205 $1,306,977 $1,302,532 $1,438,248 $1,455,589
Operating Profit 85,856 45,244(a) 78,902 113,311 105,045
Income before Taxes 79,818 38,689 72,405 102,488 91,579
Provision for Income
Taxes (30,925) (14,403) (27,412) (39,753) (35,660)
---------- ---------- ---------- ---------- ----------
Income from
Operations $ 48,893 $ 24,286(a) $44,993(b) $ 62,735 $ 55,919
========== ========== ========== ========== ==========
Per Primary Share:
Income from
Operations $ 1.62 $ .79(a) $1.42(b) $ 1.96 $ 1.72
Cash Dividends Per
Common Share .75 .75 .75 .75 .71
Average Primary
Shares Outstanding 30,217 30,845 31,628 32,057 32,583
---------- ---------- ---------- ---------- ----------
</TABLE>
(a) Includes special charge of $39,444 ($24,400 after tax) or $.78 per share.
(b) Income before cumulative effect of a change in accounting for postretirement
benefits other than pensions of $22,341 ($.70 per share).
<TABLE>
<CAPTION>
Table of Contents
<S> <C>
1 Financial Highlights
2 Letter to Shareholders
4 Description of Business Units
6 Management's Discussion and
Analysis of Operations
11 Financial Statements
16 Financial Review
23 Management's Responsibility/
Independent Auditors' Report
24 Segment Data
27 Shareholder Information
Back Directors and Officers
Cover
</TABLE>
1
<PAGE>
A Letter to
Our Shareholders
- --------------------------------------------------------------------------------
R. S. Evans
Chairman, Chief Executive Officer
and President
Overall Results
Crane's results in 1993 improved from the 1992 level with excellent performances
at several of our business units. Earnings for the year were up 3 percent to
$1.62 per share from $1.57 in 1992 before a special charge of 78 cents. Sales
remained at $1.3 billion for the year. This year's operating profit of $85.9
million increased 1 percent over last year's $84.7 million before the 1992
special charge of $39.4 million.
Operating results were excellent at Kemlite, National Vendors, and Huttig--three
of our largest units.
Kemlite achieved record results in 1993, continuing to dominate the fiberglass
panel market in the transportation industry with its innovative products. In
addition, it acquired Filon, which was fully integrated with Kemlite in the
fourth quarter of 1993, and will establish Kemlite as the leading fiberglass
panel supplier to the recreational vehicle market.
For the ninth year in a row, National Vendors increased its share of the United
States market achieving record year-end results, and now has a 55 percent share
of the domestic full service vending machine market. National Vendors' $25
million capital expansion program continues on schedule for completion in 1995.
Once completed, the new plant will consolidate production in one facility,
increase capacity, and reduce costs.
Huttig's operating profit was up 41 percent from 1992 on an 11 percent increase
in sales. Operating margins have continued to grow over the past year to 3.7
percent of sales from 2.9 percent in 1992 and 1.4 percent in 1991. In addition,
Huttig's after-tax return on invested capital improved to over 11 percent.
Huttig's new management information system is now beginning to produce results,
and allows Huttig to better serve its customers while improving asset turns and
shipping margins.
Crane's Canadian operations have returned to profitability mainly through
consolidations and cost reductions, in spite of a very poor housing market.
Full year consolidated results reflected the three-year downturn in the
aerospace industry. Although both of our aerospace companies remained profitable
and financially healthy, their contribution to earnings in 1993 was reduced
significantly from the prior year. In addition, weakness in the general
industrial market in the United States and the still-depressed European economy,
particularly in Germany, adversely affected results.
Acquisition Activity
In 1993 we continued our strategy of looking for acquisitions which complement
our existing businesses and which have leading positions in niche markets. It
was a very active year in that regard, and five acquisitions were completed for
a total of $105 million.
Perflow Instruments Ltd., acquired in February, added equipment for the
measurement and control of fluid and gas flows to our United Kingdom business,
addressing the requirements of the building maintenance and construction
markets. The addition of this high-quality digital flow control technology has
made a small but excellent addition to Crane Ltd.'s Fluid Systems Division.
In April Huttig acquired Rondel's, Inc., a distributor of doors, windows and
molding in Spokane, Washington. Rondel's has made a strong contribution to
Huttig's sales and profits, filling a void in Huttig's distribution system in
the states of Washington and Idaho. In May, Huttig purchased Whittier-Ruhle
Millwork Company, which represented its first distributor located in the mid-
Atlantic region.
In October Kemlite acquired Filon, a manufacturer of fiberglass-reinforced
plastic panels for $25.6 million. As previously mentioned, Filon is the leading
fiberglass-reinforced plastic (FRP) panel supplier to the recreational vehicle
market, a market in which Kemlite has had limited success.
2
<PAGE>
- --------------------------------------------------------------------------------
Filon brings Kemlite a new state-of-the-art manufacturing facility located in
Jonesboro, Arkansas, which increases Kemlite's capacity by 60 percent. Filon was
integrated with the Kemlite operating unit in the fourth quarter of 1993 with
the benefits already evident. Filon will add $35 million to Kemlite sales in
1994, making Kemlite the dominant supplier of FRP panels to both the
transportation and recreational vehicle markets.
At the end of December, we acquired Burks Pumps, Inc. for $70 million in cash.
The Burks acquisition will triple Crane's participation in niche pump markets to
almost $100 million a year. Burks has followed a strategy of buying pump
companies and consolidating manufacturing facilities, a strategy well-suited to
Crane's management style. They achieve improved operating results through brand
management, customer service, and capacity utilization. Burks Pumps has
manufacturing operations in Piqua, Ohio and Decatur, Illinois, and provides
engineered pumps for an array of specialized commercial, industrial and
municipal fluid handling applications. These products are marketed under the
Barnes, Burks, Weinman, Crown and Prosser brand names. Also included is the
Seller's line of tank cleaning equipment for the industrial clean-in-place
market.
During February 1994 a tender offer was commenced, terminating in mid-March, to
acquire ELDEC Corporation for a total of $94 million including assumed debt.
Similar to our Hydro-Aire and Lear Romec divisions, ELDEC is a maker of
electronic and electromechanical products and systems for the aerospace market.
The purchase of a company with excellent products and leading market share
position in an industry undergoing consolidation and change made sense to us,
since the aerospace industry will eventually improve. During 1994 we expect that
the downturn in the aerospace market will reach bottom and begin to improve in
1996. With the addition of ELDEC we should be well prepared for that turnaround.
Internal Management
During the fourth quarter of 1993 we established a sales office in Singapore to
represent our fluid handling and other products in Asia and the Pacific Rim. We
also have a Pacific representative for our millwork business in Guam, expanding
the market potential of Huttig. Our valve operations in North America, Australia
and the United Kingdom, are now managed on a global basis. Our worldwide valve
operations are exploring new arrangements for combining manufacturing operations
and have established common outsourcing for valves in eastern Europe and Asia.
This strategy should allow us to be cost competitive in the global valve markets
and improve utilization of our existing manufacturing facilities.
In January of 1994, L. Hill Clark was elected Executive Vice President of Crane
Co. by our board of directors. Hill was president of Lear Romec and later took
on additional management responsibilities within the Engineered Industrial
Products segment.
Our incentive compensation system has been based on economic value added (EVA)
since 1990. This concept is regarded by many experts, as noted in Fortune
magazine in September of 1993, to be the best for creating wealth for
shareholders. Our system uses the prior year as a benchmark with incentive
awards paid over several years. This focuses managers on continuous improvement
over the long term, since awards are subject to adjustment based on subsequent
years' performance. We are confident that the system, which is now firmly
established throughout the organization, properly aligns management and
shareholder interests. The employees of Crane have achieved, in aggregate, a
sales-per-employee increase of 7 percent, up to $156,900 per employee from
$146,600 in 1992. While this number indicates improvement, we need to do better.
The best way to increase this number is to increase sales while improving
profitability.
Financial Condition
Crane's balance sheet remains strong despite an increase in net debt of $101
million in 1993 due to acquisitions. Our strong cash flow, perhaps the best
indicator of our performance, gives us the ability to take advantage of
opportunities to increase shareholder value.
Crane's return on shareholders' equity increased to over 17 percent from the 16
percent reported in 1992. While this was below our target of 20 percent,
improvement continues from the low recessionary returns of previous years.
As always I wish to thank the employees of Crane for their efforts and
achievements in 1993. Further integration of our recent acquisitions promises to
generate solid returns, and we can look forward to a challenging and rewarding
1994.
Sincerely,
/s/ Robert S. Evans
Robert S. Evans
Chairman, Chief Executive Officer and President
February 28, 1994
3
<PAGE>
Crane Co. and Subsidiaries
<TABLE>
<CAPTION>
Unit and Location Products and Industries Served
Engineered Industrial Products
<S> <C>
Crane Valves Crane Valves, North America
Joliet, IL Angle, Ball, Butterfly, Check, Gate, Globe Valves
of Steel, Stainless Steel, Alloy, Iron and
Bronze; Valve Repair and Service
Chemical, Processing, Power, and General
Industrial Construction
Crane Ltd.
United Kingdom
Ball, Butterfly, Check, Gate and Globe Valves of
Bronze, Cast Iron, Carbon Steel and Alloys; Pumps
and Pumping Sets; Pipe Fittings; Actuators;
Condensate Recovery Sets; Heat Exchangers;
Pressure and Flow Measurement Equipment;
Mechanical Maintenance and Engineering Service
Building Services, General Industry and the Power
Generation, Petrochemical and Process Industries
Crane Australia Pty., Limited
Cast Steel and Iron Valves; Centrifugal Pumps
Petroleum, Petrochemical, Oil and Power
Industries
Crane Pumps & Systems, Inc. Barnes Pumps, Inc.
Piqua, OH Submersible Wastewater Pumps
Municipal, Industrial and Commercial Wastewater
Burks Pumps
Regenerative Turbine and End Suction Centrifugal
Pumps
Specialty Industrial Markets and Original
Equipment Manufacturers
Deming Pump
Horizontal & Vertical Centrifugal, Standard
Vertical Turbine, and Air-Operated Diaphragm
Pumps
General Industrial, Original Equipment
Manufacturers, and Water and Wastewater Treatment
Prosser/Enpo
Submersible Dewatering Pumps and Military
Products
Utility and Construction Industries; Government
Contracts
Weinman
Split Case, End Suction and In-Line Pumps
Commercial HVAC Industry
Sellers
Rotary Tank Cleaners and Steam Injectors
Engineered Cleaning Equipment for General
Industry
Chempump Division Leakproof Centrifugal Pumps, Metering Pumps,
Warrington, PA Pump Repair and Service
Chemical, Power and Hydro-Carbon Processing
Industries
Cochrane Environmental Deaerators, Demineralizers, Hot and Cold
Systems Division Process and Other Softeners, Dealkalizers,
King of Prussia, PA Filters, Industrial Water and Waste Treatment
Equipment, Multiport Relief Valves, Condensate
Drainage Systems and Clarifiers
Most industries requiring Water and Wastewater
Treatment
Hydro-Aire Division Anti-Skid and Automatic Braking Systems, Fuel
Burbank, CA and Hydraulic Pumps, Coolant Pumps and Systems,
Hydraulic and Pneumatic Valves and Regulators,
Actuators and Solid State Components
Commercial, Business and Military Aerospace
Industries
Lear Romec Division Lubrication Pumps and Fuel Pumps for Aircraft
Elyria, OH and Aircraft Engines
Commercial and Military Aircraft, Ground
Vehicles, Land and Marine Applications, and
Missiles
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Unit and Location Products and Industries Served
Engineered Industrial Products (continued)
<S> <C>
Resistoflex/Defense High Performance Separable Fittings for Operating
Jacksonville, FL Pressures to 8,000 PSI and Flexible, Plastic-
Lined Hose Assemblies
Military and Aerospace Contractors
Crane Defense Systems Specialized Handling Systems, Elevators, Winches,
Conroe, TX Ground Support Equipment, Cranes and Associated
Electronics
Shipbuilding, Aerospace and Commercial
Construction
Ferguson Manufacturer of Index Drives and Tables;
St. Louis, MO Mechanical Parts Handlers; Inline Transfer
Machines; Rotary Tables; Press Feeds; Custom
Cams; Special Intermittent Motion Machines
Automated Assembly and Parts Handling
Kemlite Company Fiberglass-Reinforced Plastic Panels used as
Joliet, IL truck interior wall liners and roofs;
recreational vehicle sidewall and roofs; and wall
and ceiling systems for the building market
Truck, Trailer, Recreational Vehicle and
Commercial Construction
Cor Tec Company Fiberglass-Reinforced Polyester Resin Laminated
Washington Court House, OH Panels for transportation, construction, marine,
signage and sound barrier applications
Truck and Trailer Manufacturers and
Infrastructure Construction
Resistoflex/Industrial Corrosion Resistant Plastic-Lined Pipe,
Marion, NC Fittings, Valves, Bellows and Hose Assemblies
Pharmaceutical, Chemical Processing, Pulp and
Paper, Petroleum Distribution, and Waste
Management Industries
Crane Canada, Inc.--Plumbing Manufacturer of Plumbing Fixtures and Plumbing
Montreal, Canada Brass
Residential, Industrial, Commercial and
Institutional Construction
Polyflon Company Radio Frequency and Microwave Components,
New Rochelle, NY Capacitors, Circuit Processing, Substrates,
Resonating Structures, Antennas
Magnetic Resonance Imaging, Radar and Microwave
Manufacturers
National Vendors Electronic Vending Machines for snack foods and
Bridgeton, MO confections, cold drinks, hot beverages,
refrigerated food and frozen food; Coin and
Currency Changers
Automated Merchandising
National Rejectors, GmbH Coin and Currency Changers, Electronic
Buxtehude, Germany Validators, Magnetic Card Cashless Payment
Systems
Automated Merchandising
Wholesale Distribution
Huttig Sash & Door Company Distributor of Millwork, Specialty Construction
Chesterfield, MO Materials and Related Products
Building Products Retailers and Contractors
Valve Systems and Controls Industrial Distributor of Automated Valves and
Houston, TX Integrated Control Systems
Petroleum, Chemical, Power and General
Processing Industries
Crane Supply of Canada Distributor of Pipe, Valves, Fittings, Plumbing
Montreal, Canada Fixtures and Supplies produced by Crane Canada
and other manufacturers
Industrial, Municipal, Commercial and
Institutional Construction
</TABLE>
5
<PAGE>
Management's Discussion and
Analysis of Operations
- ---------------------------
Results of Operations
Consolidated
<TABLE>
<CAPTION>
(In millions) 1993 1992 1991
-------- ------- --------
<S> <C> <C> <C>
Sales $1,310.2 $1,307.0 $1,302.5
Operating Profit $ 85.9 $ 45.2* $ 78.9
Operating Margin 6.6% 3.5% 6.1%
</TABLE>
* Includes a special charge of $39.4 million.
Sales of $1.3 billion in 1993 were slightly above the prior year's level. The
improvement was due to strong sales at National Vendors for automated
merchandising equipment; at Huttig which serves the residential construction
industry; and at Kemlite which supplies fiberglass-reinforced panels to the
transportation, recreational vehicle and commercial construction industries.
These increases were partially offset by lower shipments to the aerospace
industry at Hydro-Aire and Lear Romec, and weakness in businesses serving the
general industrial market. Sales in 1992 showed a small increase over the 1991
level due to strong sales at National Vendors, Huttig, Kemlite and Cor Tec.
Offsetting the increases were lower shipments at Hydro-Aire, weak economies in
Canada, Germany, and the United Kingdom, and reduced defense spending.
Operating profit totalled $85.9 million in 1993 compared to 1992 operating
profit of $45.2 million. The 1992 earnings included a $39.4 million special
charge in the second quarter. Excluding the special charge, operating profit
increased 1 percent from the adjusted 1992 level. The increase was due to
improved performance at Huttig, market share gains at National Vendors and
Kemlite, and improved results in Canada and the defense related businesses, both
the result of cost reductions. Offsetting these improvements were lower results
at the company's aerospace units, its European operations, and businesses
serving the general industrial market in the United States.
The 1992 results, before the special charge, were 7 percent above the 1991
level. The earnings improvement was due to increased housing starts, company-
wide cost reduction measures, and innovative new products at the company's
automated merchandising unit and transportation related businesses. These
improvements were partially offset by lower results at the company's aerospace
units, its German coin handling operation, and its Canadian subsidiary, Crane
Canada, Inc.
The 1992 special pre-tax charge of $39.4 million ($24.4 million after tax),
reduced earnings by $.78 per share. This charge included $20.1 million of
environmental expenses and asset write-downs associated with
Unidynamics/Phoenix; $12.1 million primarily related to product liability
exposure and excess facility costs; and $7.2 million of costs related to the
settlement of an anti-trust lawsuit involving a previously discontinued
business.
Net interest expense was reduced $2.6 million in 1993 due to the redemption of
two bond issues in August 1992 and reduced borrowing costs from interest rate
swap agreements. In 1992 net interest expense was up less than $100 thousand
over 1991 as higher borrowing levels were almost completely offset by higher
interest income on short-term investments.
Miscellaneous income totalled $0.9 million in 1993. In 1992 miscellaneous income
totalled $2.9 million and consisted primarily of a $3.7 million gain from the
sale of an equity investment.
The company's effective tax rate was 38.7 percent in 1993, 37.2 percent in 1992,
and 37.9 percent in 1991.
Results for 1991 were impacted by the early adoption of the SFAS Statement No.
106, which required accrual basis accounting for postretirement benefits other
than pensions. This change in accounting resulted in an after-tax non-cash
charge of $23.6 million. A single "catch-up" adjustment for all prior years of
$22.3 million, or $.70 per share, was reflected in the first quarter of 1991 as
the cumulative effect of a change in accounting, and $1.3 million, or $.04 per
share, related to the additional charge for the 1991 fiscal year.
Income from operations, net of taxes, totalled $48.9 million in 1993. This
compares to $48.7 million in 1992 before the special charge ($24.4 million after
tax) and $45 million in 1991 before the cumulative effect of the accounting
change.
The return on sales remained at 3.7 percent in 1993--the same as last year,
excluding the special charge and up from 3.5 percent in 1991, before the
cumulative effect of the accounting change.
Income per share increased to $1.62 compared to $1.57 in 1992 before the special
charge of $.78 per share. Income per share for 1991, before the cumulative
effect of the accounting change, was $1.42.
6
<PAGE>
- --------------------------------------------------------------------------------
The Engineered Industrial Products segment's operating profit declined 8 percent
to $78.2 million in 1993 on 6 percent lower sales. In 1992 operating profit
increased slightly on a $3 million sales decline from 1991. Operating margins
decreased to 11.7 percent of sales from 12.0 percent in 1992 and 11.9 percent in
1991 due principally to lower aerospace earnings.
North American Valves operating profit totalled approximately $1 million in
1993, significantly below the 1992 level. The valves market was extremely weak
with lower pricing affecting all product lines. This follows a year when profits
were double the 1991 level. In 1993 the company consolidated its Canadian valve
business with its valve business in the United States. The Canadian business
operated at a loss in both 1993 and 1992. In March 1992 the company purchased
the Jenkins Valve product line for $4 million. The valve business in the United
Kingdom operated at a profit of $2.5 million, down $0.8 million from the 1992
level of $3.3 million, but a significant improvement over the $0.6 million loss
in 1991. Sales increased 4 percent from the 1992 level due to higher export
shipments and the acquisition of Perflow Instruments, Ltd. in February 1993.
Shipments in 1992 were down 10 percent from the 1991 level. Crane Australia's
profit was up 14 percent on 4 percent higher sales in 1993.
Engineered Industrial Products
<TABLE>
<CAPTION>
(In millions) 1993 1992 1991
------ ------ ------
<S> <C> <C> <C>
Sales $667.6 $710.9 $713.9
Operating Profit $ 78.2 $ 85.1* $ 84.8
Operating Margin 11.7% 12.0% 11.9%
</TABLE>
* Before special charge of $34.7 million (includes $20.1 million of
environmental expenses and asset write-downs at Unidynamics/Phoenix; $7.4
million for product liability exposure; and $7.2 million related to the
settlement of an anti-trust lawsuit involving a previously discontinued
business).
The company acquired Burks Pumps, Inc., a manufacturer of engineered pumps, in
December 1993. This acquisition will complement the company's Chempump and
Deming pump businesses and significantly increases its involvement in niche
markets in the pump industry. Chempump manufactures sealless canned motor pumps
and Deming manufactures pumps for the general industrial market. Burks' annual
sales are double the $30 million combined annual revenues of Chempump and
Deming. The Chempump and Deming pump businesses showed improved operating
results in 1993, increasing 37 percent from the $1.3 million profit recorded in
1992, after suffering a loss in 1991. Sales decreased 6 percent in 1993 compared
to a 4 percent increase in 1992.
Cochrane Environmental Systems designs and markets water and wastewater
treatment equipment and systems for almost every major industry. The company
reported a 23 percent decrease in profit in 1993, after a 12 percent decrease in
1992. Profit for 1993 was lower principally due to reduced margins as a result
of competitive pricing pressures. Sales decreased 8 percent in 1993, after
showing a 3 percent improvement in 1992.
Hydro-Aire is the world leader in the design and manufacture of electronically
controlled anti-skid braking systems for the aerospace industry. Hydro-Aire
continued to be impacted by the down-turn in the aerospace industry over the
last 3 years which resulted in lower shipments of 22 percent, 12 percent, and 2
percent, respectively. Profitability declined 33 percent in 1993, 18 percent in
1992, and 13 percent in 1991.
Lear Romec is one of the world leaders in the supply of high quality oil
lubrication and fuel boost pumps for the aerospace industry. Sales and operating
profit continue to be adversely affected by the depressed aerospace market and
cutbacks in military spending. Operating profit declined 31 percent in 1993
after a 14 percent decline in 1992 on lower shipments of 20 percent and 12
percent, respectively. In 1991 earnings were up 29 percent on a 15 percent
increase in sales from the 1990 level.
The defense businesses which now include Resistoflex/Defense and Crane Defense
Systems supply a variety of products and equipment such as separable fittings
for aircraft engines, cargo and personnel elevators, cranes, and ammunition
handling equipment. Sales were down 25 percent in 1993 due to the March
divestiture of the precision ordnance business of Unidynamics/Phoenix, Inc. This
compares to a 30 percent decline in sales for 1992. Operating profit increased
by approximately $2.9 million, mainly due to the improved results at Crane
Defense Systems.
7
<PAGE>
Management's Discussion and
Analysis of Operations (continued)
- --------------------------------------------------------------------------------
The defense businesses continued to focus on cost reduction measures in a
declining market. These businesses represent less than 2 percent of Crane's
total sales.
Ferguson has a complete line of products for transferring and positioning
components on assemblies in an automated process. Ferguson's profit decreased
$1.7 million in 1993 on an 11 percent drop in sales due to weakness in the
general industrial market in the U.S. and Europe. This compared to a profit
increase of $2.3 million in 1992 on 9 percent higher sales. In 1991 Ferguson
made a small profit.
Kemlite is the leading supplier of fiberglass-reinforced panels to the
transportation, recreational vehicle and building products markets. Kemlite's
operating profit increased 36 percent over last year, with sales up 18 percent.
Kemlite maintained its strong market position within the transportation market,
and significantly expanded its position in the recreational vehicle market with
the October 1993 acquisition of Filon. Filon was integrated with Kemlite's
fiberglass panel business with the benefit of the consolidation already evident
in fourth quarter results. Filon added $7.2 million to Kemlite's sales in 1993.
In 1992 operating profit more than doubled on a 25 percent increase in sales
compared to lower profit and sales in 1991. The increase was due to product
innovations, such as its translucent roof, and competitive pricing.
Cor Tec manufactures fiberglass-reinforced laminated panels used primarily for
the truck and truck trailer industry. Operating profit increased $0.8 million
with operating margins increasing to 7.7 percent of sales versus 3.5 percent in
1992. Sales increased 56 percent in 1992 and led to a significant improvement in
profit, compared to a small operating loss in 1991.
Resistoflex/Industrial manufactures and sells corrosion-resistant plastic-lined
pipes, fittings and valves used in the chemical process and pharmaceutical
industries. Resistoflex products are designed to satisfy the requirements for
environmentally responsible systems that safely handle fluids without emitting
dangerous vapors into the atmosphere. Operating profit declined to 16 percent of
sales from 23 percent in 1992 as a result of competitive market conditions.
Sales decreased 11 percent in 1993 from the prior year. 1992 showed a small
increase in profit on 3 percent lower sales. In 1991 both sales and operating
profit were slightly below record 1990 results.
The Canadian Plumbing operation offers a full line of plumbing products for the
residential and commercial building markets in Canada. Operating profit
increased $4.4 million to $4.2 million which included a $3.1 million favorable
pension adjustment. During 1993 the Canadian valve business was consolidated
into the domestic Valve division to form North American Valves. Results for 1992
have been adjusted for this change. Plumbing operated at a small loss in 1992
which included a $1.5 million charge to cover the cost of closing the British
Columbia Pottery plant.
Polyflon manufactures high-performance substrate systems and high-voltage, high-
frequency capacitors for commercial and aerospace uses and magnetic resonance
imaging (MRI) for the medical industry. Sales in 1993 totalled $2.4 million and
were down 20 percent from the prior year level.
National Vendors is the industry leader in the design, manufacture and
distribution of vending machines for the automated merchandising industry.
Results for 1993 improved due to continued market acceptance of National
Vendors' products. Profit increased 15 percent in 1993, compared to 37 percent
in 1992. Included in 1993 results was a $3.5 million charge to cover the cost of
an unfavorable jury verdict in December. Sales totalled $131 million in 1993, a
22 percent increase over the record level of $110 million recorded in 1992. In
1991, the United States Postal Service awarded National Vendors a $22.3 million
contract for an upgraded version of the Postal Commodity Merchandiser; $14.6
million of this order was completed in 1993 and $7.7 million in 1992.
8
<PAGE>
- --------------------------------------------------------------------------------
National Rejectors, GmbH designs and manufactures coin validators and handling
systems for the automatic vending market throughout Europe. The depressed
European economy and changes in gambling regulations in Germany caused shipments
to be lower in 1993 and 1992 and resulted in operating losses for the two years.
In 1991, the company was profitable.
The Wholesale Distribution segment's results continued to improve in 1993, with
operating profit increasing 58 percent on an 8 percent increase in sales. The
signicant increase was due mainly to the continued recovery in the residential
construction market in the United States. Profits improved substantially in 1992
after experiencing sales and operating profit declines in 1991.
Wholesale Distribution
<TABLE>
<CAPTION>
(In millions) 1993 1992 1991
------ ------ ------
<S> <C> <C> <C>
Sales $655.2 $608.5 $602.8
Operating Profit $ 20.0 $ 12.6 $ 9.4
Operating Margin 3.0% 2.1% 1.6%
</TABLE>
Huttig Sash and Door Company is the largest nationwide distributor of millwork,
windows, doors, and related products in the United States. Operating profit of
$19.3 million was $5.6 million above the prior year level, with shipments
increasing $37.3 million on a same branch basis. The improved performance was
primarily due to increased sales volume and improved margins. Huttig's markets
have shown improvement nationwide with the exception of California. Results for
1993 included the April acquisition of Rondel's Inc. and the May acquisition of
Whittier-Ruhle Millwork Co. These acquisitions accounted for an increase in
sales of $16.5 million and profit of $1 million, and expanded Huttig markets in
the states of Washington and New Jersey. Operating profit for 1992 of $13.7
million was $8.4 million above the 1991 level, on an 11 percent increase in
sales. Shipments and operating profit in 1991 decreased 17 percent and 72
percent, respectively, from the prior year level. Approximately 40 percent of
the 1991 sales decline was attributable to the divestiture of the Sea-Pac unit
of Palmer G. Lewis. Profit in 1991 was negatively impacted by non-recurring
costs which totalled approximately $4.5 million and included the closing of six
facilities.
Valve Systems and Controls is a value-added industrial distributor providing
power-operated valves and flow control systems to the petrochemical, oil
refinery, and pipeline transmission industries. The unit operated at a small
loss in 1993 on a 3 percent sales decline. Sales for 1992 were 20 percent below
the prior year and the unit operated at break-even. Operating profit decreased
in 1991 despite a 7 percent increase in sales due to lower profit margins caused
by lower demand for valve actuated products in the petrochemical market which
increased price competition.
Crane Supply Canada, a wholesale distributor of plumbing supplies, valves and
piping, operated at a $1.1 million profit in 1993 on a small improvement in
sales from the prior year level. The profit improvement is attributable to cost
reduction efforts implemented during the year. The unit operated at a loss of
$1.2 million on an 11 percent decline in sales in 1992 resulting from a decline
in sales and margins in the industrial sector. In 1991, Canada Supply
experienced a small profit decline on 6 percent lower sales, but remained
profitable due to the implementation of cost reduction measures.
9
<PAGE>
Management's Discussion and
Analysis of Operations (continued)
- --------------------------------------------------------------------------------
Liquidity and
Capital Resources
The company generated $71.0 million of cash from operating activities compared
to $64.1 million in 1992 and $81 million in 1991. Cash flow from operations in
1993 was equal to 35 percent of the net debt outstanding at year end.
At December 31, 1993, the net debt to capital ratio was 41 percent compared to
28 percent and 24 percent in 1992 and 1991, respectively. The company's working
capital totalled $122 million compared to $205 million in 1992, with the current
ratio at 1.4:1 compared to 2.2:1 in 1992. During the year $11.7 million of debt
was retired. Interest coverage remained strong at 8.0 times interest expense for
1993 compared to 6.4 for 1992 and 7.3 for 1991.
Expenditures relating to modernization, productivity improvements and expansion
of existing businesses amounted to $38.8 million, compared to $23.2 million in
1992 and $21.4 million in 1991. Capital spending is expected to increase
significantly in 1994 as a plant expansion at National Vendors and a new office
building for Kemlite are completed. These two expenditures alone will total
approximately $20 million in 1994. In addition, other significant productivity
improvement projects have been planned. These projects will be funded by cash
flows from operating activities.
In 1992 the company recorded a $39.4 million pre-tax special charge to cover
environmental clean-up costs, asset write-downs, product liability exposure,
excess facility costs, and the settlement of an anti-trust lawsuit. During 1993
the company expended $2.9 million of the reserve, with $5.4 million and $2.2
million expected to be expended in 1994 and 1995.
During the year the company purchased 394,000 shares of its common stock for
$10.4 million, compared to 1,062,000 shares for $24.8 million and 876,000 shares
for $19.8 million in 1992 and 1991, respectively.
As of December 31, 1993, the company had $281 million in uncommitted short-term
credit lines of which $173 million was unused. In January 1994 these lines were
increased by $40 million. Long-term debt outstanding at year-end totalled $109
million, with scheduled payments of $3.9 million in 1994 and $1.0 million in
1995.
In March 1992, the company sold $100 million of twelve-year senior notes with a
coupon rate of 8.5 percent in a public offering. This enabled the company to
terminate its $100 million revolving credit agreement with Morgan Guaranty Trust
Company. In August 1992 the company exercised its right to redeem the
outstanding $44.8 million of 7% Subordinated Debentures Series B due July 1,
1994 at a redemption price of 100% of the principal amount outstanding.
Unidynamics Corporation, a wholly owned subsidiary, exercised its right to
redeem the $8.7 million of 91/2% Sinking Fund Debentures due April 1, 1999 at
the redemption price of 100.95% of the principal amount.
During 1993 the company acquired Burks Pumps, Inc., for approximately $70
million, the operating assets of Filon for approximately $26 million, Rondel's
Inc. and Whittier-Ruhle Millwork Company for $5.8 million and $3.1 million,
respectively, and purchased Perflow Instruments Ltd. for $1.2 million.
In addition, the company purchased 663,810 shares of Mark Controls Corporation
for approximately $6.0 million.
Subsequent to December 31, 1993 the company entered into an agreement to
purchase the outstanding shares of ELDEC Corporation for approximately $74
million. The company will initially finance the transaction through short-term
credit lines.
In March 1993 the company sold the precision ordnance business of its
subsidiary, Unidynamics/Phoenix, Inc. for $6.0 million.
During 1992 the company acquired certain assets of Jenkins Canada, Inc. for
approximately $4 million and purchased the equivalent of 600,000 shares of Mid
Ocean Reinsurance Company, Ltd. for $10 million.
The adoption of SFAS No. 109, "Accounting for Income Tax", led to a small
favorable tax adjustment in 1993.
In January 1994 the company will adopt SFAS No. 112 "Employer's Accounting for
Postemployment Benefits". The company accrues most postemployment benefits when
incurred, thus the effect of SFAS No. 112 will not be material.
10
<PAGE>
Consolidated Statements of Income Crane Co. and Subsidiaries
(In thousands except per share data)
<TABLE>
<CAPTION>
For Years Ended December 31 1993 1992 1991
---------- ---------- ----------
<S> <C> <C> <C>
Net Sales $1,310,205 $1,306,977 $1,302,532
Operating Costs and Expenses:
Cost of sales 1,016,548 1,006,009 1,002,800
Selling, general and administrative 178,381 187,750 192,419
Depreciation and amortization 29,420 28,530 28,411
Special charge -- 39,444 --
---------- ---------- ----------
1,224,349 1,261,733 1,223,630
---------- ---------- ----------
Operating Profit 85,856 45,244(a) 78,902
Other Income (Deductions):
Interest expense--net of interest
income of $4,465, $4,979 and $2,097
in 1993, 1992 and 1991 (6,931) (9,485) (9,443)
Miscellaneous--net 893 2,930 2,946
---------- ---------- ----------
(6,038) (6,555) (6,497)
---------- ---------- ----------
Income before Taxes 79,818 38,689 72,405
Provision for Income Taxes 30,925 14,403 27,412
---------- ---------- ----------
Income before Cumulative Effect of a
Change in Accounting 48,893 24,286 44,993
Cumulative effect of a change in
accounting for postretirement
benefits other than pensions, net of
taxes of $13,862 -- -- (22,341)
---------- ---------- ----------
Net Income $ 48,893 $ 24,286(a) $ 22,652
========== ========== ==========
Primary Net Income Per Share:
Income before cumulative effect of a
change in accounting $ 1.62 $ .79 $1.42
Cumulative effect of a change in
accounting for postretirement
benefits other than pensions -- -- (.70)
---------- ---------- ----------
Net Income $ 1.62 $ .79(a) $ $.72
========== ========== ==========
Average primary shares outstanding 30,217 30,845 31,628
Fully Diluted Net Income Per Share:
Income before cumulative effect of
a change in accounting $ 1.61 $ .78 $ 1.41
Cumulative effect of a change in
accounting for postretirement
benefits other than pensions -- -- (.70)
---------- ---------- ----------
Net Income $ 1.61 $ .78(a) $ .71
========== ========== ==========
Average fully diluted shares
outstanding 30,404 31,080 31,914
Cash Dividends Declared Per Common
Share $ .75 $ .75 $ .75
---------- ---------- ----------
</TABLE>
(a) Includes special charge of $39,444 ($24,400 after tax) or $.78 per share.
11
<PAGE>
Consolidated Balance Sheets
(In thousands except share data)
<TABLE>
<CAPTION>
Balance December 31 1993 1992
-------- --------
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 12,592 $ 49,104
Accounts receivable, less allowance of $3,054 ($1,671
in 1992) 178,767 157,702
Inventories, at lower of cost, principally LIFO, or
market; replacement cost would be higher by $54,470
($49,623 in 1992):
Finished goods 119,014 104,353
Finished parts and subassemblies 24,261 18,905
Work in process 22,516 22,072
Raw materials and supplies 27,908 18,703
-------- --------
Total Inventories 193,699 164,033
Other current assets 8,488 7,814
-------- --------
Total Current Assets 393,546 378,653
Property, Plant and Equipment at Cost:
Land 22,525 20,422
Buildings and improvements 137,640 114,958
Machinery and equipment 261,543 241,930
-------- --------
Gross Property, Plant and Equipment 421,708 377,310
Less accumulated depreciation 222,314 214,125
-------- --------
Net Property, Plant and Equipment 199,394 163,185
Other Assets 38,142 26,205
Cost in Excess of Net Assets Acquired, less accumulated
amortization of $11,812 ($9,897 in 1992) 113,083 62,168
-------- --------
$744,165 $630,211
======== ========
</TABLE>
12
<PAGE>
Crane Co. and Subsidiaries
<TABLE>
<CAPTION>
Balance December 31 1993 1992
-------- --------
<S> <C> <C>
Liabilities and Shareholders' Equity
Current Liabilities:
Current maturities of long-term debt $ 3,852 $ 9,348
Loans payable 108,048 32,906
Accounts payable 73,385 59,405
Accrued liabilities 81,107 71,144
U.S. and foreign taxes on income 5,291 1,220
-------- --------
Total Current Liabilities 271,683 $174,023
Long-Term Debt 105,557 111,048
Reserves and Other Liabilities 20,631 23,008
Accrued Postretirement Benefits 42,570 39,398
Accrued Pension Liability 6,767 7,709
Deferred Income Taxes 6,138 3,673
Preferred Shares, par value $.01--5,000,000
shares authorized -- --
Common Shareholders' Equity:
Common shares, par value $1.00: Authorized
--80,000,000 shares, Outstanding--29,863,044
shares (29,958,470 in 1992) after deducting
18,540,813 shares in treasury (18,182,624
in 1992) 29,863 29,958
Capital surplus 10,160 15,252
Retained earnings 263,666 236,475
Currency translation adjustment (12,870) (10,333)
-------- --------
Total Common Shareholders' Equity 290,819 271,352
-------- --------
$744,165 $630,211
======== ========
</TABLE>
13
<PAGE>
Consolidated Statements Crane Co. and Subsidiaries
of Cash Flows (In thousands)
<TABLE>
<CAPTION>
For Years Ended December 31 1993 1992 1991
--------- -------- --------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net income $ 48,893 $ 24,286 $ 22,652
Accounting change--postretirement benefits -- -- 22,341
--------- -------- --------
Income before accounting change 48,893 24,286 44,993
Special charge -- 29,284 --
Depreciation 24,144 23,719 23,723
Amortization 5,276 4,811 4,688
Deferred income taxes 980 (8,157) (1,661)
Cash (used for) provided from operating
working capital (3,400) (11,725) 15,298
Other (4,874) 1,866 (6,020)
--------- -------- --------
Total from Operating Activities 71,019 64,084 81,021
--------- -------- --------
Cash Flows from Investing Activities:
Capital expenditures (38,838) (23,174) (21,440)
Proceeds from disposition of capital assets 986 1,264 6,571
Purchase of equity investments (5,964) (10,000) --
Sale of equity investments -- 3,733 12,035
Payments for acquisitions (105,493) (4,002) --
Proceeds from divestiture 6,029 -- --
--------- -------- --------
Total Used for Investing Activities (143,280) (32,179) (2,834)
--------- -------- --------
Cash Flows from Financing Activities:
Equity:
Dividends paid (22,511) (22,999) (23,472)
Reacquisition of shares (10,405) (25,060) (19,530)
Stock options exercised 3,322 3,592 3,600
--------- -------- --------
(29,594) (44,467) (39,402)
--------- -------- --------
Debt:
Proceeds from issuance of long-term debt -- 99,000 --
Repayments of long-term debt (11,737) (70,462) (22,690)
Net increase (decrease) in short-term debt 77,123 10,705 (1,845)
--------- -------- --------
65,386 39,243 (24,535)
--------- -------- --------
Total Provided from (Used for)
Financing Activities 35,792 (5,224) (63,937)
--------- -------- --------
Effect of exchange rate on cash and
cash equivalents (43) (158) (32)
--------- -------- --------
(Decrease) Increase in cash
and cash equivalents (36,512) 26,523 14,218
Cash and cash equivalents at
beginning of year 49,104 22,581 8,363
--------- -------- --------
Cash and cash equivalents at end of year $ 12,592 $ 49,104 $ 22,581
========= ======== ========
Detail Of Cash (Used For) Provided From
Operating Working Capital:
Accounts receivable $ (8,503) $ 4,909 $ 4,213
Inventories (10,581) 9,845 24,760
Other current assets (454) (737) (1,253)
Accounts payable 9,895 (2,264) 2,395
Accrued liabilities 2,055 (8,052) (7,692)
U.S. and foreign taxes on income 4,188 (15,426) (7,125)
--------- -------- --------
Total $ (3,400) $(11,725) $ 15,298
========= ======== ========
Supplemental disclosure of cash
flow information:
Interest paid $ 17,418 $ 19,395 $ 15,019
Income taxes paid 34,721 35,650 35,195
--------- -------- --------
</TABLE>
See Financial Review
14
<PAGE>
Consolidated Statements of Changes Crane Co. and Subsidiaries
in Common Shareholders' Equity
<TABLE>
<CAPTION>
Currency Total Common
Common Capital Retained Translation Shareholders'
(In thousands except share data) Shares Surplus Earnings Adjustment Equity
------- -------- -------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Balance December 31, 1990 $31,245 $ 48,027 $235,210 $ 2,324 $316,806
Net income -- -- 22,652 -- 22,652
Cash dividends -- -- (23,472) -- (23,472)
Reacquisition of 876,456 shares (876) (18,904) -- -- (19,780)
Exercise of stock options, 269,524 shares 270 3,330 -- -- 3,600
Conversion of debentures, 12,798 shares 12 41 -- -- 53
Restricted stock awarded, 92,120 shares, net 92 2,286 (415) -- 1,963
Currency translation adjustment -- -- -- (1,344) (1,344)
------- -------- -------- -------- --------
Balance December 31, 1991 30,743 34,780 233,975 980 300,478
Net income -- -- 24,286 -- 24,286
Cash dividends -- -- (22,999) -- (22,999)
Reacquisition of 1,062,413 shares (1,062) (23,748) -- -- (24,810)
Exercise of stock options, 237,597 shares 237 3,355 -- -- 3,592
Conversion of debentures, 11,971 shares 12 38 -- -- 50
Restricted stock awarded, 28,750 shares, net 28 827 1,213 -- 2,068
Currency translation adjustment -- -- -- (11,313) (11,313)
------- -------- -------- -------- --------
Balance December 31, 1992 29,958 15,252 236,475 (10,333) 271,352
Net income -- -- 48,893 -- 48,893
Cash dividends -- -- (22,511) -- (22,511)
Reacquisition of 394,220 shares (394) (10,011) -- -- (10,405)
Exercise of stock options, 216,792 shares 217 3,105 -- -- 3,322
Conversion of debentures, 25,962 shares 26 78 -- -- 104
Restricted stock awarded, 56,040 shares, net 56 1,736 809 -- 2,601
Currency translation adjustment -- -- -- (2,537) (2,537)
------- -------- -------- -------- --------
Balance December 31, 1993 $29,863 $ 10,160 $263,666 $(12,870) $290,819
======= ======== ======== ======== ========
</TABLE>
See Financial Review
15
<PAGE>
Financial Review
- --------------------------------------------------------------------------------
Accounting Policies
Principles of Consolidation--The consolidated financial statements include all
subsidiaries. All significant intercompany items have been eliminated. Certain
prior year amounts have been reclassified to conform with the 1993 presentation.
Cash Equivalents--Highly liquid investments with original maturities of three
months or less are considered cash equivalents.
Inventories--Inventories are stated at the lower of cost or market principally
on the last-in, first-out (LIFO) method of inventory valuation. The reduction of
inventory quantities has resulted in a liquidation of LIFO inventories acquired
at lower costs prevailing in prior years. Liquidations have reduced costs of
sales by $1,500,000, $2,500,000, and $3,400,000 in 1993, 1992 and 1991,
respectively.
Property, Plant and Equipment--Depreciation was provided primarily by the
straight-line method over the estimated useful lives of the respective assets
which range from three to twenty-five years.
Intangibles--Cost in excess of net assets acquired is being amortized on a
straight-line basis principally over forty years. Other intangible assets are
being amortized on a straight-line basis over their estimated useful lives which
range from five to twenty years.
Income Taxes--The company changed its method of accounting for income taxes,
effective January 1, 1993, to conform with SFAS No. 109, "Accounting for Income
Taxes." The Statement requires the recognition of deferred tax assets and
liabilities for the future tax consequences attributable to differences between
the financial carrying amounts of existing assets and liabilities and their tax
basis. Prior to 1993, provisions were made for deferred income taxes where
differences existed between the time that transactions affected taxable income
and the time that these transactions entered into the determination of income
for financial statement purposes.
Interest Rate Swap Agreements--The company enters into interest rate swap
agreements to moderate its exposure to interest rate changes and to lower the
overall cost of borrowings. The differential to be paid or received is accrued
as interest rates change and is recognized in income over the life of the
agreements.
Net Income Per Share--Primary earnings per share calculations are based upon the
weighted average number of common shares outstanding after giving effect to
dilutive stock options. Fully diluted earnings per share gives effect to the
assumed conversion of convertible debentures and the effect of dilutive stock
options.
Revenues--Revenues are generally recorded when title passes to the customer.
Revenues on long-term contracts are recognized under the percentage-of-
completion method of accounting and are measured principally on either a cost-
to-cost or a unit of delivery basis. These contracts represent approximately 2%
of sales in any one year. Accounts receivable include unreimbursed costs and
accrued profits to be billed of $4,615,000, and $8,116,000 at December 31, 1993
and 1992, respectively.
Special Charge
The 1992 special charge of $39.4 million, or 78 cents per share, included $20.1
million of environmental expenses and asset write-downs associated with
Unidynamics/Phoenix, $12.1 million primarily related to product liability
exposure and excess facility costs, and $7.2 million of costs related to the
settlement of an anti-trust lawsuit involving a previously discontinued
business.
Research and Development
Product development and engineering costs aggregated approximately $18,300,000,
$19,200,000, and $18,600,000 in 1993, 1992 and 1991, respectively. In addition,
approximately $139,000, $4,100,000, and $6,900,000 was received in 1993, 1992
and 1991, respectively, for customer-sponsored research and development relating
to projects within the Engineered Industrial Products segment.
Miscellaneous--Net
<TABLE>
<CAPTION>
For Years Ended
(In thousands) December 31, 1993 1992 1991
---- ------ -------
<S> <C> <C> <C>
Gain (Loss) on disposal
of capital assets $425 $ (779) $(4,237)
Gain on investments 556 3,997 7,039
Other (88) (288) 144
---- ------ -------
$893 $2,930 $ 2,946
==== ====== =======
</TABLE>
Income Taxes
The company adopted the provisions of SFAS 109 effective January 1, 1993. The
effect of adopting this standard was not material to the company's financial
statements.
A reconciliation between income taxes based on the application of the statutory
federal income tax rate to income before income taxes and income taxes as set
forth in the Consolidated Statements of Income follows:
<TABLE>
<CAPTION>
(In thousands) 1993 1992 1991
------- -------- -------
<S> <C> <C> <C>
Income before taxes:
Domestic $83,296 $ 49,980 $67,484
Foreign (3,478) (11,291) 4,921
------- -------- -------
79,818 38,689 72,405
------- -------- -------
Statutory federal tax at 35%
(34% in 1992 and 1991) 27,936 13,154 24,618
Increase (reduction) from:
Foreign and local taxes 4,756 1,551 3,122
Goodwill 686 659 664
Non-taxable FSC income (737) (804) (783)
Effect of tax rate increase (510) -- --
Other (1,206) (157) (209)
------- -------- -------
Provision for income taxes $30,925 $ 14,403 $27,412
======= ======== =======
Percentage of income
before taxes 38.7% 37.2% 37.9%
======= ======== =======
</TABLE>
16
<PAGE>
- --------------------------------------------------------------------------------
The foregoing provision includes (benefits)/charges for foreign taxes of
$413,000, ($4,235,000) and $2,941,000 and state taxes of $5,140,000, $3,352,000
and $4,405,000 in 1993, 1992 and 1991, respectively.
At December 31, 1993, the company had unremitted earnings of foreign
subsidiaries of $64 million for which a deferred tax liability has not been
recognized. It is the intention of the company to indefinitely reinvest these
earnings in foreign operations. The determination of the amount of the
unrecognized deferred tax liability for temporary differences related to these
foreign subsidiaries is not practicable.
Deferred income taxes at December 31, 1993 consisted of:
<TABLE>
<CAPTION>
(In thousands) Assets Liabilities
------- -----------
<S> <C> <C>
Accelerated depreciation $ -- $15,516
Difference between book basis
and the tax basis of assets -- 9,350
Postretirement benefits 15,684 --
Inventory related 1,388 --
Insurance related 5,354 --
Environmental related 5,414 --
Pension -- 4,084
Deferred compensation 1,790 --
Other 5,706 963
------- -------
$35,336 $29,913
======= =======
</TABLE>
At December 31, 1993 current deferred tax assets of $12.6 million were included
in other receivables and $1.1 million of current deferred liabilities were
included in income tax payable. Non-current deferred tax assets and non-current
deferred tax liabilities of $6.1 million were included in deferred income taxes.
The provision for income taxes is composed of the following:
<TABLE>
<CAPTION>
(In thousands 1993 1992 1991
------- ------- -------
<S> <C> <C> <C>
Deferred income taxes $ 980 $(8,157) $(1,661)
Current income taxes 29,945 22,560 29,073
------- ------- -------
$30,925 $14,403 $27,412
======= ======= =======
</TABLE>
The components of deferred income tax (benefits)/expenses are as follows:
<TABLE>
<CAPTION>
(In thousands) 1993 1992 1991
------- ------- -------
<S> <C> <C> <C>
Depreciation $(1,829) $(3,109) $(1,425)
Reserves 2,271 (5,348) (635)
Other 538 300 399
------- ------- -------
$ 980 $(8,157) $(1,661)
======= ======= =======
</TABLE>
Postretirement Benefits
In 1991 the company adopted SFAS No. 106 "Postretirement Benefits Other Than
Pensions," which requires accrual of postretirement health care and life
insurance benefits during the years an employee provides services. In years
prior to 1991 the company expensed these benefits on a cash basis.
Postretirement health care and life insurance benefits are provided for certain
domestic and foreign employees who meet minimum age and service requirements.
The company does not pre-fund these benefits and has the right to modify or
terminate benefits.
<TABLE>
<CAPTION>
(In thousands) December 31, 1993 1992
------- -------
<S> <C> <C>
Accumulated postretirement
benefit obligation:
Retirees $24,807 $24,076
Fully-eligible active
plan participants 1,973 2,297
Other active plan participants 6,669 8,503
------- -------
Total 33,449 34,876
Unrecognized net gain 9,121 4,522
------- -------
Accrued postretirement
benefit $42,570 $39,398
======= =======
Net periodic cost:
Service cost--benefits earned
during the period $ 850 $ 943
Interest cost on accumulated
benefit obligation 2,768 2,772
Amortization of gain (182) (100)
------- -------
Net cost 3,436 3,615
Benefits paid (2,482) (2,588)
Burks Pumps acquisition 2,218 --
Accrued postretirement benefit--
beginning of year 39,398 38,371
------- -------
Accrued postretirement benefit--
end of year $42,570 $39,398
======= =======
</TABLE>
The cost of covered benefits was assumed to increase 13% for 1993, and then to
decrease gradually to 5% by 2007 and remain at that level thereafter. In prior
years, the cost of covered benefits was assumed to increase 15% until 1993 and
then decrease gradually to 7% by 2009, and remain at that level thereafter. An
increase in the assumed health care cost trend rate by one percentage point
would increase the accumulated postretirement benefit obligation by
approximately $3.6 million and the net periodic cost by approximately $0.8
million for the year. The discount rate used in determining the accumulated
postretirement benefit obligation was 7.25% in 1993 and 8.5% in prior years.
The company participates in several multi-employer insurance plans, which
provide benefits to certain employees under collective bargaining agreements.
Total contributions to these plans were approximately $2,193,000, in 1993,
$1,853,000 in 1992, and $1,660,000 in 1991.
17
<PAGE>
Financial Review
(continued)
- --------------------------------------------------------------------------------
Pensions
The company and its subsidiaries have pension plans which cover substantially
all of their employees and non-employee directors. The plans generally provide
benefit payments using a formula based on length of service and final average
compensation, except for some hourly employees for whom the benefits are a fixed
amount per year of service. The company's policy is to fund at least the minimum
amount required by the applicable regulations. The pension plan for salaried
employees in Canada was changed in 1993 from a defined benefit to a defined
contribution money purchase plan, resulting in a curtailment gain of
approximately $3.1 million. The adjacent table sets forth net periodic pension
costs.
<TABLE>
<CAPTION>
(In thousands) 1993 1992 1991
-------- -------- --------
<S> <C> <C> <C>
Service cost-benefits earned
during the period $ 7,305 $ 7,598 $ 7,543
Interest cost on projected
benefit obligation 13,979 13,864 14,730
Actual gain on plan assets (35,872) (14,368) (31,514)
Net amortization and deferral 13,443 (4,947) 13,426
-------- -------- --------
Pension (income) expense
for company-sponsored
pension plans $ (1,145) $ 2,147 $ 4,185
======== ======== ========
</TABLE>
The following table sets forth by funded status the amounts recognized in the
company's balance sheet at December 31, for company-sponsored pension plans:
<TABLE>
<CAPTION>
1993 1992
----------------------- -----------------------
(In thousands) Overfunded Underfunded Overfunded Underfunded
---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Actuarial present value of
benefit obligation:
Vested $153,497 $6,500 $136,111 $4,691
Nonvested 5,052 99 4,303 132
-------- -------- -------- ------
Accumulated benefit
obligation 158,549 6,599 140,414 4,823
Effect of future pay
increases 28,829 282 32,467 310
-------- -------- -------- ------
Projected benefit obligation 187,378 6,881 172,881 5,133
-------- -------- -------- ------
Assets and book reserves
relating to such benefits:
Funded assets at fair value 232,475 5,890 203,292 4,155
Book reserves, net (5,830) 709 (1,690) 668
-------- -------- -------- ------
226,645 6,599 201,602 4,823
-------- -------- -------- ------
Assets and book reserves
greater (less) than projected
benefit obligations $ 39,267 $ (282) $ 28,721 $ (310)
======== ======== ======== ======
Consisting of:
Unrecognized net asset
(liability) at date of
adoption less amortization $ 13,195 $ (675) $ 15,684 $ (748)
Unrecognized net gains
(losses) 25,138 (396) 13,992 (180)
Unrecognized prior service
cost 934 -- (955) --
Adjustment required to
recognize minimum liability -- 789 -- 618
-------- -------- -------- ------
$ 39,267 $ (282) $ 28,721 $ (310)
======== ======== ======== ======
</TABLE>
18
<PAGE>
- --------------------------------------------------------------------------------
The assumed discount rate, expected return on assets and rate of compensation
level increases used to determine the projected benefit obligation for U.S.
plans at December 1993 were 7.25%, 8.25%, and 4.75%, respectively. The rates at
December 1992 and 1991 were 8.5%, 9.5%, and 6.25%, respectively. The rates for
foreign plans at December 1993 were 7.5% to 8.25% for discount rate, 8.25% to
9.0% for return on assets, and a 7.5% compensation increase. The foreign rates
at December 1992 and 1991 were 8.5% to 9.0%, 9.0%, and 6.25% to 7.5%,
respectively.
At December 31, 1993, substantially all plan assets are invested in listed
stocks and bonds. These investments include common stock of the company which
represents 3% of plan assets.
The company participates in several multi-employer pension plans, which provide
benefits to certain employees under collective bargaining agreements. Total
contributions to these plans were approximately $1,482,000 in 1993, $1,301,000
in 1992, and $1,177,000 in 1991.
The company sponsors a savings and investment plan [401(k) Plan] which is
available to eligible non-bargaining and salaried employees of the company and
certain of its subsidiaries. The company contributes, on a matching basis, an
amount equal to 50% of deferred savings up to 6% of each participant's
compensation, all of which is invested in company stock. During the last three
years, the company made annual contributions of approximately $2 million to the
401(k) Plan.
Employer's Accounting for Postemployment Benefits
The Financial Accounting Standards Board requires that SFAS No. 112, "Employers'
Accounting for Postemployment Benefits," be implemented for fiscal years
beginning after December 15, 1993. The company currently accrues most
postemployment benefits when incurred, therefore, the adoption of SFAS 112 in
January 1994 will not be material.
Accrued Liabilities
<TABLE>
<CAPTION>
(In thousands) December 31, 1993 1992
------- -------
<S> <C> <C>
Employee-related expenses $27,209 $23,455
Insurance 13,532 13,774
Environmental 4,360 5,214
Sales allowances 4,693 4,603
Interest 4,004 4,565
Litigation 3,500 --
Taxes other than income 2,532 2,171
Professional fees 2,452 2,081
Pensions 2,812 915
Other 16,013 14,366
------- -------
$81,107 $71,144
======= =======
</TABLE>
Reserves and Other Liabilities
<TABLE>
<CAPTION>
(In thousands) December 31, 1993 1992
------- -------
<S> <C> <C>
Environmental $ 8,669 $ 7,165
Insurance 4,707 6,616
Warranty 4,494 4,685
Relocation 640 1,954
Employee benefits 602 1,051
Other 1,519 1,537
------- -------
$20,631 $23,008
======= =======
</TABLE>
Short-Term Financing
At December 31, 1993, the company had $281,000,000 in uncommitted short-term
credit lines with domestic and foreign banks, $173,000,000 of which was unused.
Long-Term Financing
<TABLE>
<CAPTION>
(In thousands) December 31, 1993 1992
-------- --------
<S> <C> <C>
Crane Co.:
Senior debt:
8 1/2% notes due 2004 $100,000 $100,000
Original issue discount (852) (936)
-------- --------
99,148 99,064
-------- --------
Subordinated debt:
7% Sinking fund debentures due 1993 - 7,612
5% Convertible debentures
due 1993 and 1994, convertible
at $3.70 and $4.26 738 889
-------- --------
Total Crane Co. 99,886 107,565
-------- --------
Subsidiaries:
Industrial revenue bonds 4,757 8,550
Capital lease obligations 3,284 2,605
Other 1,482 1,676
-------- --------
Total Subsidiaries 9,523 12,831
-------- --------
Total long-term debt 109,409 120,396
Less current portion 3,852 9,348
-------- --------
Long-term debt net of current portion $105,557 $111,048
======== ========
</TABLE>
At December 31, 1993, the principal amounts of long-term debt repayments
required for the next five years are $3,852,000 in 1994, $1,045,000 in 1995,
$954,000 in 1996, $887,000 in 1997, and $806,000 in 1998.
19
<PAGE>
Financial Review
(continued)
- --------------------------------------------------------------------------------
Interest Rate Swap Agreements
The company periodically enters into interest rate swap agreements to manage its
exposure to interest rate changes and to lower the overall cost of borrowings.
All interest rate swaps are subject to market risk as interest rates fluctuate.
During 1993 the company entered into five agreements. Two swap positions which
changed the company's interest rate exposure from fixed to floating were
terminated in August with realized gains. Two outstanding agreements with
notional amounts of $20 million each that convert the company's interest rate
exposure from fixed to floating will mature in May and December 1994. The
company also entered into an off-market swap to lock in the gain on an exposed
swap position executed in 1992. The gain on this transaction is being amortized
over the life of the original agreement.
In 1992 the company transacted an off-market swap to lock in a gain on an
interest rate swap position that was recorded earlier in the year. This gain is
being amortized over the life of the original agreement.
Fair Value of Financial Instruments
The following disclosure of the estimated fair value of financial instruments
was made in accordance with the requirements of SFAS No. 107. The estimated fair
value amounts have been determined by the company using available market
information and appropriate valuation methodologies.
<TABLE>
<CAPTION>
1993 1992
---------------------------- --------
Carrying Fair Carrying Fair
(In thousands) Amount Value Amount Value
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Assets:
Investments $ 16,083 $ 16,010 $ 10,000 $ 10,000
Liabilities:
Short-term debt 111,900 115,450 42,254 42,778
Long-term debt 105,557 118,707 111,048 121,437
Unrealized gain on
interest rate swap
agreements--net -- 1,153 -- 739
</TABLE>
Investments--the company purchased the equivalent of 600,000 shares of Mid Ocean
Reinsurance Company, Ltd. in 1992 for $10 million. In 1993 the company purchased
663,810 shares of Mark Controls Corporation for approximately $6 million which
approximates fair value at December 31, 1993. These investments are included in
other assets on the balance sheet.
Short-term and Long-term debt--rates currently available for borrowing with
similar terms and remaining maturities are used to estimate fair value for debt
issues that are not quoted on an exchange.
Interest rate swap agreements--the fair value of interest rate swaps is the
amount at which they could be settled, based on estimates obtained from dealers.
Commitments and Contingencies
The company leases certain facilities, vehicles and equipment under capital and
operating leases with various terms. Certain leases contain renewal or purchase
options. Future minimum payments, by year and in the aggregate, under these
leases with initial or remaining terms of one year or more consisted of the
following at December 31, 1993:
<TABLE>
<CAPTION>
Minimum
Capital Operating Sublease
(In thousands) Leases Leases Income Net
------- --------- -------- -------
<S> <C> <C> <C> <C>
1994 $ 800 $ 9,878 $ 818 $ 9,860
1995 639 8,441 397 8,683
1996 554 6,585 151 6,988
1997 439 5,234 103 5,570
1998 360 3,773 93 4,040
Thereafter 1,540 11,547 350 12,737
------- ------- ------ -------
Total minimum
lease payments 4,332 $45,458 $1,912 $47,878
======= ====== =======
Interest (1,048)
-------
Present value $ 3,284*
=======
</TABLE>
* Includes $530 due within one year.
The weighted average interest rate for capital leases is 7.7%.
Rental expense for all operating leases was $15,865,000, $17,081,000 and
$18,910,000 for 1993, 1992 and 1991, respectively.
The cost of assets capitalized under leases is as follows at December 31:
<TABLE>
<CAPTION>
(In thousands) 1993 1992
------- -------
<S> <C> <C>
Buildings and improvements $11,223 $11,569
Machinery and equipment 8,344 8,218
------- -------
19,567 19,787
Less accumulated depreciation 15,808 15,655
------- -------
$ 3,759 $ 4,132
======= =======
</TABLE>
The company has established a self-insurance program to cover certain liability
costs beneath the levels of insurance provided by its various policies in force.
At December 31, 1993, the company had received certain proposed notices of
adjustment to federal income tax and was involved in various claims and legal
actions arising in the ordinary course of business. In the opinion of
management, the ultimate disposition of these matters will not have a material
adverse effect on the company's financial condition.
The company has been named a potentially responsible party (PRP) in connection
with various site clean-ups directed by the Environmental Protection Agency or
by state environmental agencies. Most involvements at these sites are on a de
minimus basis or remedial actions have been sufficiently completed that either
individually or in the aggregate they are not expected at
20
<PAGE>
- --------------------------------------------------------------------------------
this time to be material. However, all environmental sites by their nature are
subject to uncertainties including uncertainties about the status of the law,
regulations, technology, and information related to the individual site. On the
basis of current information, there are two sites where the company's
environmental exposure at this time is not believed to be de minimus or remote.
One site in Arizona arises out of operations of a subsidiary prior to its
acquisition by the company. At that site, a soil vapor extraction system will be
completed in 1994 to operate for 3 years, and a groundwater remediation system
will be completed in 1995 to operate for 15 years as presently conceived. The
future costs of both systems including operating costs have been fully reserved.
The company is presently in litigation with the subsidiary's insurers and has
reached negotiated settlements with certain of the carriers. No insurance
recoveries were anticipated in establishing the reserve.
At the other site in California, the company has completed a soil clean-up and
has committed to pay 30% of the construction cost of a water blending facility
for a water remediation project with six other PRPs. The company has obtained,
after litigation, reimbursement from its insurance carriers and has provided
sufficient reserves to cover anticipated future expenditures for the blending
facility. In January 1994, the company was advised that it will be one of up to
forty parties named in a cost recovery action for this same site by another PRP
who is implementing the major portion of that water remediation project. The net
amount demanded of the company is approximately $13 million. Based on a
preliminary understanding of the facts, the company believes its proportionate
responsibility, if any, should not be material.
Acquisitions, Divestitures and Investments
On December 29, 1993 the company acquired Burks Pumps, Inc. for $70 million. The
net assets of Burks Pumps have been included in the financial statements at
values representing a preliminary allocation of the purchase price. Although
final valuations will affect this allocation, they are not expected to have a
material effect on the financial statements. The purchase price exceeded the
preliminary fair values assigned by $50 million. Burks Pumps has manufacturing
operations in Piqua, OH and Decatur, IL and provides engineered pumps for an
array of specialized commercial, industrial and municipal fluid handling
applications. These products are marketed under the Barnes, Burks, Weinman,
Crown and Prosser brand names. Also included is the Seller's line of tank
cleaning equipment for the industrial clean-in-place market. This acquisition
substantially increases the company's involvement in niche markets in the pump
industry.
In October 1993 the company acquired Filon, a manufacturer of fiberglass-
reinforced plastic (FRP) panels, for approximately $26 million. Filon was
integrated with Kemlite which produces FRP panels for the transportation,
building products and recreational vehicle markets.
During April and May 1993, the operating assets of Rondel's Inc. and Whittier-
Ruhle Millwork Company were purchased for $5.8 million and $3.1 million,
respectively. Both companies are value-added wholesale distributors of high
quality building products and will enhance Huttig's nationwide distribution
network. In addition, Crane Ltd. purchased Perflow Instruments Ltd., a
manufacturer of equipment for the measurement and control of fluid and gas
flows, for $1.2 million.
In March 1992, certain assets of Jenkins Canada, Inc., a manufacturer of bronze
and iron valves, were acquired by the company for approximately $4 million.
The above mentioned acquisitions were accounted for by the purchase method.
Since Burks Pumps was acquired late in December, its operating results were not
material and are not included in the company's 1993 income. The results of
operations for all other above- mentioned acquisitions have been included in the
financial statements from their respective dates of purchase. These acquisitions
did not have a material effect on the results of operations.
Pro forma financial information assuming the acquisition of Burks Pumps, Inc.
had taken place as of the beginning of 1992 is provided below:
<TABLE>
<CAPTION>
(In thousands except per share data) 1993 1992
---------- ----------
<S> <C> <C>
Net Sales $1,365,700 $1,359,617
Operating Profit 89,432 48,945
Net Income 49,363 23,235
Income Per Share $ 1.63 $ .75
---------- ----------
</TABLE>
During March 1993 the company sold the precision ordnance business of its
subsidiary, Unidynamics/Phoenix, Inc., for $6 million.
At December 31, 1993, the company held 663,810 shares of Mark Controls
Corporation. The company's investment of approximately $6 million is carried at
cost which approximated market, and represents approximately 13.2 percent of the
outstanding shares of Mark Controls Corporation.
During 1992 the company purchased the equivalent of 600,000 shares of Mid Ocean
Reinsurance Company, Ltd. for $10 million.
Subsequent Event
In February 1994 the company announced a definitive merger agreement with ELDEC
Corporation whereby the company commenced a tender offer at $13.00 per share for
all outstanding shares of common stock of ELDEC. The tender offer, upon
completion, will be followed by a merger in which any nontendering stockholders
will have the right to obtain $13.00 per share in cash. As part of the
transaction, the company has signed agreements with certain ELDEC shareholders
to purchase approximately 51% of the outstanding ELDEC shares at $13.00 per
share upon the closing of the tender offer. ELDEC has approximately 5,696,000
shares outstanding. ELDEC custom designs and manufactures electronic and
electromechanical systems for aerospace and defense applications.
21
<PAGE>
Financial Review
(continued)
- --------------------------------------------------------------------------------
Stock Options and Stock Award Plans
A summary of stock option transactions follows:
<TABLE>
<CAPTION>
Number of Shares 1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
Outstanding January 1 1,215,966 1,230,438 1,249,713
Options granted 283,000 264,000 268,250
Options cancelled (8,500) (40,875) (18,001)
Options exercised (216,792) (237,597) (269,524)
--------- --------- ---------
Outstanding December 31 1,273,674 1,215,966 1,230,438
========= ========= =========
</TABLE>
At December 31, 1993, options for 809,736 shares were exercisable and 458,384
shares were available for grant. Per share option prices ranged from $6.56 to
$27.25.
The company's restricted stock award plan provides for awards of common stock to
key officers and employees, subject to resale restrictions. The current
restrictions on outstanding awards are scheduled to lapse, in part, over a five
year period, or upon the achievement of certain performance objectives.
In 1993 the shareholders approved a proposal of the board of directors to amend
the company's restricted stock award plan, extending the expiration date from
April 30, 1993 to May 30, 1998 and increasing as of May 10, 1993 the common
shares available for grant to 500,000 shares. The company awarded 73,000 shares
in 1993, and as of December 31, 1993, 427,000 shares are available for future
awards. Compensation expense is determined based on the market value at the time
of the award and is normally amortized over the five year restriction period.
Pursuant to the Non-Employee Director Restricted Stock Plan, non-employee
directors received 3,040 shares of company stock in 1993 as a group. All
directors who are not full-time employees of the company are eligible to
participate in the plan. The shares are issued each year after the company's
annual meeting, are forfeitable if the director ceases to remain a director
until the company's next annual meeting, and may not be sold for a period of
five years, or until the director leaves the board.
Preferred Shares Purchase Rights
In July 1988, the company distributed one preferred share purchase right for
each outstanding share of common stock. The preferred rights were not
exercisable when granted and may only become exercisable under certain
circumstances involving actual or potential acquisitions of the company's common
stock by a person or affiliated persons. Depending upon the circumstances, if
the rights become exercisable, the holder may be entitled to purchase shares of
the company's Series A Junior Participating Preferred Stock, or shares of common
stock of the acquiring person. Preferred shares purchasable upon exercise of the
rights will not be redeemable. Each preferred share will be entitled to
preferential rights regarding dividend and liquidation payments, voting power,
and, in the event of any merger, consolidation or other transaction in which
common shares are exchanged, preferential exchange rate. The rights will remain
in existence until June 27, 1998, unless they are earlier terminated, exercised
or redeemed. The company has authorized five million shares of $.01 par value
preferred stock.
Analysis By Segment of Business
The company has two industry segments: Engineered Industrial Products and
Wholesale Distribution. Operations in the Engineered Industrial Products segment
involve the production and sale of various engineered products including valves,
specialty pumps, anti-skid braking control systems for the aerospace industry, a
variety of products and equipment with defense applications, electronic vending
machines and coin handlers and fiberglass reinforced panels. Operations in the
Wholesale Distribution segment involve the distribution of millwork, windows,
doors and related products, plumbing supplies, valves and piping, actuated
valves and flow control systems.
An analysis of sales, operating profit, assets, capital expenditures and
depreciation and amortization appears on page 24.
22
<PAGE>
Management's Responsibilities
for Financial Reporting
- --------------------------------------------------------------------------------
The accompanying consolidated financial statements of Crane Co. and subsidiaries
have been prepared by management in conformity with generally accepted
accounting principles and, in the judgment of management, present fairly and
consistently the company's financial position and results of operations. These
statements by necessity include amounts that are based on management's best
estimates and judgments and give due consideration to materiality.
The accounting systems and internal accounting controls of the company are
designed to provide reasonable assurance that the financial records are reliable
for preparing consolidated financial statements and maintaining accountability
for assets and that, in all material respects, assets are safeguarded against
loss from unauthorized use or disposition. Qualified personnel throughout the
organization maintain and monitor these internal accounting controls on an
ongoing basis. In addition, the company's internal audit department
systematically reviews the adequacy and effectiveness of the controls and
reports thereon. The consolidated financial statements have been audited by
Deloitte & Touche, independent auditors, whose report appears on this page.
The Audit Committee of the Board of Directors, composed solely of outside
directors, meets periodically with management and with the company's internal
auditors and independent auditors to review matters relating to the quality of
financial reporting and internal accounting control and the nature, extent and
results of their audits. The company's internal auditors and independent
auditors have free access to the Audit Committee.
/s/ R. S. Evans
R. S. Evans
Chairman, Chief Executive Officer and President
/s/ J. P. Cronin
J. P. Cronin
Vice President--Finance and Chief Financial Officer
Independent Auditors' Report
- --------------------------------------------------------------------------------
Deloitte &
Touche
- ----------
LOGO
To the Shareholders of Crane Co.:
We have audited the accompanying consolidated balance sheets of Crane Co. and
its subsidiaries as of December 31, 1993 and 1992, and the related consolidated
statements of income, cash flows and changes in common shareholders' equity for
each of the three years in the period ended December 31, 1993. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Crane Co. and its subsidiaries at
December 31, 1993 and 1992, and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 1993 in
conformity with generally accepted accounting principles.
As discussed in the note "Postretirement Benefits", in 1991 the Company changed
its method of accounting for postretirement benefits other than pensions to
conform with Statement of Financial Accounting Standards No. 106.
/s/ Deloitte & Touche
Stamford, Connecticut
January 24, 1994, except for the note "Subsequent Event"
on page 21, as to which the date is February 11, 1994
23
<PAGE>
Analysis by Segment Crane Co. and Subsidiaries
(In thousands)
<TABLE>
<CAPTION>
1993 1992 1991
---------------- ---------------- ----------------
Amount % Amount % Amount %
---------- --- ---------- --- ---------- ---
<S> <C> <C> <C> <C> <C> <C>
Net Sales:
Industry Segments:
Engineered Industrial Products $ 667,576 50 $ 710,875 54 $ 713,876 54
Wholesale Distribution 655,218 50 608,519 46 602,761 46
---------- --- ---------- --- ---------- ---
1,322,794 100 1,319,394 100 1,316,637 100
Intersegment Sales (12,589) (12,417) (14,105)
---------- ---------- ----------
$1,310,205 $1,306,977 $1,302,532
========== ========== ==========
Geographic Region:
United States $1,031,724 77 $ 999,543 75 $ 961,775 73
Canada 171,576 13 172,345 13 189,470 14
Other International 135,752 10 157,733 12 172,187 13
---------- --- ---------- --- ---------- ---
1,339,052 100 1,329,621 100 1,323,432 100
Interregional Sales (28,847) (22,644) (20,900)
---------- ---------- ----------
$1,310,205 $1,306,977 $1,302,532
========== ========== ==========
Operating Profit: (a)
Industry Segments:
Engineered Industrial Products $ 78,166 80 $ 85,080 87 $ 84,830 90
Wholesale Distribution 19,969 20 12,640 13 9,365 10
---------- --- ---------- --- ---------- ---
98,135 100 97,720 100 94,195 100
Corporate (12,279) (13,032) (15,293)
Special Charge -- (39,444) --
---------- ---------- ----------
$ 85,856 $ 45,244 $ 78,902
========== ========== ==========
Geographic Region: (b)
United States $ 94,751 97 $ 97,020 99 $ 83,812 89
Canada 3,930 4 (2,091) (2) 3,041 3
Other International (546) (1) 2,791 3 7,342 8
---------- --- ---------- --- ---------- ---
98,135 100 97,720 100 94,195 100
Corporate (12,279) (13,032) (15,293)
Special Charge -- (39,444) --
---------- ---------- ----------
$85,856 $ 45,244 $ 78,902
========== ========== ==========
Assets:
Industry Segments:
Engineered Industrial Products $ 472,883 69 $ 368,044 67 $ 399,284 68
Wholesale Distribution 207,716 31 180,737 33 189,933 32
---------- --- ---------- --- ---------- ---
680,599 100 548,781 100 589,217 100
Corporate 63,566 81,430 41,020
---------- ---------- ----------
$ 744,165 $ 630,211 $ 630,237
========== ========== ==========
Geographic Region:
United States $ 522,772 77 $ 394,276 72 $ 417,692 71
Canada 84,194 12 83,354 15 87,227 15
Other International 73,633 11 71,151 13 84,298 14
---------- --- ---------- --- ---------- ---
680,599 100 548,781 100 589,217 100
Corporate 63,566 81,430 41,020
---------- ---------- ----------
$ 744,165 $ 630,211 $ 630,237
========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Capital Expenditures Depreciation and Amortization
------------------------- -----------------------------
1993 1992 1991 1993 1992 1991
------- ------- ------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Industry Segments:
Engineered Industrial Products $23,875 $19,210 $16,790 $21,079 $21,498 $21,340
Wholesale Distribution 8,615 3,767 4,650 5,279 4,406 4,474
Corporate 6,348 197 -- 3,062 2,626 2,597
------- ------- ------- ------- ------- -------
$38,838 $23,174 $21,440 $29,420 $28,530 $28,411
======= ======= ======= ======= ======= =======
Geographic Region:
United States $31,999 $13,616 $12,021 $22,372 $21,078 $21,495
Canada 3,182 4,263 5,219 3,264 3,396 3,079
Other International 3,657 5,295 4,200 3,784 4,056 3,837
------- ------- ------- ------- ------- -------
$38,838 $23,174 $21,440 $29,420 $28,530 $28,411
======= ======= ======= ======= ======= =======
</TABLE>
(a) For 1992, $34,744 of the special charge relates to the Engineered Industrial
Products segment, and $4,700 is applicable to Corporate. 1991 results
included charges (credits) of $1,346, $946 and $(124) to Engineered
Industrial Products, Wholesale Distribution and Corporate, respectively,
related to the adoption of SFAS No. 106, "Postretirement Benefits Other than
Pensions."
(b) For 1992, $34,444 of the special charge is applicable to the United States
and $5,000 is applicable to Canada.
24
<PAGE>
Five-year Summary of Selected Crane Co. and Subsidiaries
Financial Data (In thousands except per share data)
<TABLE>
<CAPTION>
Years Ended December 31 1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Sales $1,310,205 $1,306,977 $1,302,532 $1,438,248 $1,455,589
Depreciation and Amortization 29,420 28,530 28,411 30,102 33,629
Operating Profit 85,856 45,244(a) 78,902 113,311 105,045
Interest Expense 11,396 14,464 11,540 16,746 19,177
Income before Taxes 79,818 38,689 72,405 102,488 91,579
Provision for Income Taxes (30,925) (14,403) (27,412) (39,753) (35,660)
---------- ---------- ---------- ---------- ----------
Income from Operations $ 48,893 $ 24,286(a) $ 44,993(b) $ 62,735 $ 55,919
========== ========== ========== ========== ==========
Income Per Common Share
Primary $ 1.62 $ .79(a) $ 1.42(b) $ 1.96 $ 1.72
Fully Diluted 1.61 .78(a) 1.41(b) 1.94 1.69
Cash Dividends Per Common Share $ .75 $ .75 $ .75 $ .75 $ .71
Assets $ 744,165 $ 630,211 $ 630,237 $ 664,811 $ 654,557
Long-Term Debt $ 105,557 $ 111,048 $ 83,847 $ 104,143 $ 119,102
---------- ---------- ---------- ---------- ----------
</TABLE>
(a) Includes special charge of $39,444 ($24,400 after tax) or $.78 per share.
(b) Income before cumulative effect of a change in accounting for postretirement
benefits other than pensions of $22,341 ($.70 per share).
25
<PAGE>
Quarterly Results for the Year (Unaudited) Crane Co. and Subsidiaries
(In thousands except per share data)
<TABLE>
<CAPTION>
Quarter Year
------------------------------------------ ----------
First Second Third Fourth
-------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
1993
Net Sales $312,313 $337,693 $337,924 $322,275 $1,310,205
Cost of Sales 241,804 259,455 263,867 251,422 1,016,548
Depreciation and
Amortization 5,593 5,353 5,476 5,034 21,456
-------- -------- -------- -------- ----------
Gross Profit $ 64,916 $ 72,885 $ 68,581 $ 65,819 $ 272,201
-------- -------- -------- -------- ----------
Net Income $ 10,766 $ 15,726 $ 12,762 $ 9,639 $ 48,893
Primary Net Income
Per Share $ .36 $ .52 $ .42 $ .32 $ 1.62
-------- -------- -------- -------- ----------
1992
Net Sales $313,541 $338,550 $338,862 $316,024 $1,306,977
Cost of Sales 242,440 261,066 262,431 240,072 1,006,009
Depreciation and
Amortization 5,519 5,534 5,226 5,120 21,399
Special Charge -- 39,444 -- -- 39,444
-------- -------- -------- -------- ----------
Gross Profit $ 65,582 $ 32,506 $ 71,205 $ 70,832 $ 240,125
-------- -------- -------- -------- ----------
Net Income (Loss) $ 9,006 $ (9,480)(a) $ 10,515 $ 14,245 $ 24,286(a)
Primary Net Income
(Loss) Per Share $ .29 $ (.31)(a) $ .34 $ .47 $ .79(a)
-------- -------- -------- -------- ----------
</TABLE>
(a) Includes special charge of $39,444 ($24,400 after tax) or $.78 per share.
26
<PAGE>
Market and Dividend Information
- -- Crane Co. Common Shares
<TABLE>
<CAPTION>
New York Stock Exchange Composite Price Per Share Dividends Per Share
------------------------------------------------- -------------------
1993 1992 1993 1992
------------------------ -----------------------
Quarter High Low High Low
----------- ----------- ----------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
First $27 7/8 $22 5/8 $27 7/8 $23 3/8 $.1875 $.1875
Second 30 5/8 24 7/8 27 5/8 23 .1875 .1875
Third 30 7/8 26 5/8 25 1/4 21 7/8 .1875 .1875
Fourth 29 24 1/8 24 3/8 21 3/4 .1875 .1875
------ ------
$.75 $.75
====== ======
</TABLE>
At December 31, 1993 there were approximately 6,900 holders of record of Crane
Co. common stock.
Shareholder Information
- ------------------------------------------------------------------------------
Form 10-K
Copies of Form 10-K for 1993 as filed with the Securities and Exchange
Commission are available upon written request from the Secretary's Office at
Crane Co., 100 First Stamford Place, Stamford, CT 06902
Annual Meeting
The Crane Co. annual meeting of shareholders will be held at 10:00 a.m. on
Monday, May 9, 1994 at the Sheraton Stamford Hotel, One First Stamford Place,
Stamford, CT 06902 in the Freedom II room.
Stock Listing
Crane Co. common stock is traded on the New York Stock Exchange, listed under
the symbol "CR."
Independent Auditors
Deloitte & Touche
333 Ludlow Street
Stamford, CT 06902
Equal Employment
Opportunity Policy
Crane Co. is an equal opportunity employer. It is the policy of the company to
recruit, hire, promote and transfer to all job classifications without regard to
race, color, religion, sex, age, disability or national origin.
Environment, Health &
Safety Policy
Crane Co. is committed to protecting the environment and will strive to protect
the biosphere by taking responsibility to prevent serious or irreversible
environmental degradation through efficient operations and activities.
Crane Co. recognizes environmental management among its highest priorities
throughout the corporation, and has established policies and programs which are
integral and essential elements of the business plans of each of the business
units.
Crane Co. will strive to minimize environmental, health and safety risks to all
its employees, and to public health in the communities in which it operates by
utilizing safe technologies, training programs, and emergency preparedness.
Crane Co. will seek to continually improve the development, design and operation
of its facilities through the efficient use of energy and the sustainable use of
renewable resources, minimizing adverse environmental impact through waste
reduction, recycling and responsible waste disposal.
Crane Co. will manufacture and produce products or services that minimize
environmental impact and that are safe when properly used and maintained, and
will promote the adoption of these principles by its contractors and suppliers.
Crane Co. will promptly communicate to all affected persons the known hazards
and safeguards associated with its manufacturing processes and activities while
utilizing good science and research to define and efficiently manage all
significant risks.
Crane Co. has committed management resources to these goals by adopting the
above policies, and by establishing the position of Vice President-Environment,
Health and Safety, which is responsible for assuring compliance, measuring
environmental performance, and conducting regular environmental audits in order
to provide appropriate information to the Crane Co. management team and to
regulatory authorities.
27
<PAGE>
Shareholder Information
(continued)
- --------------------------------------------------------------------------------
Stock Transfer Agent
and Registrar of Stock
First Chicago Trust
Company of New York
Customer Service:
1-201-324-0498
Non-Postal Deliveries
14 Wall St., Ste. 4680
New York, NY 10005
Dividend Reinvestment
Optional Payments
P.O. Box 13531
Newark, NJ 07188-0001
General Correspondence &
Changes of Address
P.O. Box 2500
Jersey City, NJ 07303-2500
Transfer of Stock Certificates
P.O. Box 2506
Jersey City, NJ 07303-2506
Bond Trustees and
Disbursing Agents
Bank of America
National Trust and
Savings Association
Customer Service Center:
1-800-423-5041
Corporate Trust #8510
333 So. Beaudry Avenue; 25th Fl.
Los Angeles, CA 90017
The Bank of New York
Corporate Trust Department:
1-800-524-4458
101 Barclay Street
New York, NY 10286
Dividend Reinvestment and
Stock Purchase Plan
Crane offers shareholders the opportunity to participate in a Dividend
Reinvestment and Stock Purchase Plan. The plan provides two convenient methods
for increasing your investment in Crane Co. common shares, without paying fees
and commissions.
Dividend Reinvestment: for all or part of your dividends on Crane common shares
and voluntary cash payments you choose to make; and
Voluntary Cash Only: of any amount from $10 to a maximum of $5,000 a month.
Under terms of the Plan, First Chicago Trust Company of New York will act as
agent for shareholders interested in purchasing additional Crane common shares
automatically, on a regular basis.
The details of this plan and its benefits to you as a Crane shareholder are
described in a brochure available by writing to:
First Chicago Trust
Company of New York
Dividend Reinvestment Plan--
Crane Co.
Post Office Box 2598,
Jersey City, NJ 07303-2598
28
<PAGE>
EXHIBIT 22
CRANE CO.
EXHIBIT E TO FORM 10-K
ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 1993
SUBSIDIARIES OF REGISTRANT
--------------------------
The following is a list of active subsidiaries of the registrant and their
jurisdictions of incorporation. All of these subsidiaries are wholly-owned,
directly or indirectly, and all are included in the consolidated financial
statements. The names of several other subsidiaries have been omitted as they
would not, if considered in the aggregate as a single subsidiary, constitute a
significant subsidiary. Subsidiaries of subsidiaries are indicated by
indentation.
UniDynamics Corporation Delaware
Crane, GmbH Germany
National Rejectors, Inc. GmbH Germany
Ferguson Machine Company, S.A. Belgium
Unidynamics/St. Louis, Inc. Delaware
Unidynamics/Phoenix, Inc. Delaware
Huttig Sash & Door Company Delaware
Crane Australia Pty., Limited Australia
Crane Canada Inc. Canada
Crane Limited Great Britain
Dyrotech Industries, Inc. Delaware
Kemlite Company, Inc. Delaware
Burks Pumps, Inc. Delaware
<PAGE>
EXHIBIT 24
EXHIBIT F
INDEPENDENT AUDITORS' CONSENT
- -----------------------------
We consent to the incorporation by reference in Registration Statement No. 33-
44688 on Form S-8, Post-Effective Amendment No. 2 to Registration Statement No.
33-18251 on Form S-8, Registration Statement No. 33-22700 on Form S-8 and Post-
Effective Amendment No. 7 to Registration Statement No. 33-22904 on Form S-8 of
our reports dated January 24, 1994 (except for the note "Subsequent Event" on
page 21, as to which the date is February 11, 1994), appearing in and
incorporated by reference in this Annual Report on Form 10-K of Crane Co. for
the year ended December 31, 1993.
Deloitte & Touche
Stamford, Connecticut
March 31, 1994
